EXHIBIT 99.1
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION CONTACT:
Mike Duncan - Investor Relations
Monaco Coach Corporation
(541) 686-8011
http://www.monaco-online.com/
MONACO COACH CORPORATION REPORTS
SECOND QUARTER 2003 RESULTS
COBURG, Oregon, July 24, 2003 — Monaco Coach Corporation (NYSE: MNC) today reported revenue and earnings for its second quarter ended June 28, 2003. Second quarter earnings per share were 2 cents, on second quarter revenue of $268.4 million. Net income for the second quarter was $582 thousand. Operating income for the second quarter was $1.5 million. Second quarter unit sales of Monaco Coach Corporation products were 2,260 units. Second quarter motorhome sales totaled 1,708 units and second quarter towable recreational vehicles totaled 552 units.
For the six months ended June 28, 2003, earnings per share were 17 cents on revenue of $541.9 million. Net income for the six months ended June 28, 2003 was $4.9 million. Operating income for the six months ended June 28, 2003 was $9.5 million. Unit sales of Monaco Coach Corporation products for the six months ended June 28, 2003 totaled 4,566 units. Six-month motorhome sales totaled 3,345 units and six-month towable recreational vehicles totaled 1,221 units.
According to Monaco Coach Corporation Chairman and Chief Executive Officer Kay Toolson, “We met several key goals for the second quarter. Foremost was the approximate $20 million reduction in our finished goods inventory. However, in order to realize this inventory reduction, we offered wholesale and retail sales incentives that pressured our margins and earnings. Weighed against the business considerations and financial cost associated with carrying a high finished goods inventory, second quarter earnings pressure was expected as we focus on improving our balance sheet.”
Monaco Coach Corporation President John Nepute added, “Our 2004 models have been very well accepted by dealers and consumers. It has not been necessary to offer sales promotions on 2004 models. However, we are continuing to offer some retail sales incentives on 2003 models that remain on dealers’ lots. The successful introduction of our 2004 models, along with gradually strengthening retail sales, have contributed to steady improvement to our order backlog.”
Monaco Coach Corporation Vice President and Chief Financial Officer Marty Daley stated, “We continue to balance demand with production rates and finished goods inventory, and we expect
third quarter revenue to be similar to the second quarter. Based on our current production rates, we should be able to further reduce finished goods inventory in the third quarter. As a result of lower run rates and continuing retail promotions, we expect third quarter gross margins in the 10.5% to 11% range, and third quarter sales, general, and administrative expenses in the 8.75% to 9.25% 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.
The statements above regarding the Company’s 2004 model introductions, its ability to make further inventory reductions, and its third quarter 2003 expectations for sales revenue, gross margin, and sales, general, and administrative expenses are forward-looking statements based on current information and expectations and involve a number of risks and uncertainties. A number of factors could cause actual results to differ materially from these statements, including slower than anticipated sales of new and existing products, a general slowdown in the economy, new product introductions by competitors, or the loss of dealers or a deterioration in the relationships with dealers. Please refer to the Company’s SEC reports, including but not limited to the most recent Form 10-Q, the annual report on Form 10-K for 2002, and the 2002 Annual Report to Shareholders for additional factors. These filings can be accessed over the Internet at http:www.sec.gov.
2
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited: dollars in thousands)
|
|
|
December 28, |
|
June 28, |
|
||
|
ASSETS |
|
|
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|
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||
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Current assets: |
|
|
|
|
|
||
|
Trade receivables, net |
|
$ |
116,647 |
|
$ |
104,790 |
|
|
Inventories |
|
175,609 |
|
161,176 |
|
||
|
Resort lot inventory |
|
26,883 |
|
22,622 |
|
||
|
Prepaid expenses |
|
3,612 |
|
3,527 |
|
||
|
Deferred income taxes |
|
33,379 |
|
32,468 |
|
||
|
Total current assets |
|
356,130 |
|
324,583 |
|
||
|
|
|
|
|
|
|
||
|
Property, plant and equipment, net |
|
135,350 |
|
143,052 |
|
||
|
Debt issuance costs net of accumulated amortization of $389, and $566, respectively |
|
683 |
|
806 |
|
||
|
Goodwill, net of accumulated amortization of $5,320 and $5,320, respectively |
|
55,254 |
|
55,254 |
|
||
|
Total assets |
|
$ |
547,417 |
|
$ |
523,695 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES |
|
|
|
|
|
||
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Current liabilities: |
|
|
|
|
|
||
|
Book overdraft |
|
$ |
3,518 |
|
$ |
9,486 |
|
|
Line of credit |
|
51,413 |
|
41,785 |
|
||
|
Current portion of long-term note payable |
|
21,667 |
|
21,667 |
|
||
|
Accounts payable |
|
78,055 |
|
67,396 |
|
||
|
Product liability reserve |
|
21,322 |
|
21,491 |
|
||
|
Product warranty reserve |
|
31,745 |
|
29,329 |
|
||
|
Income taxes payable |
|
4,536 |
|
0 |
|
||
|
Accrued expenses and other liabilities |
|
29,633 |
|
28,545 |
|
||
|
|
|
|
|
|
|
||
|
Total current liabilities |
|
241,889 |
|
219,699 |
|
||
|
|
|
|
|
|
|
||
|
Long-term note payable |
|
30,333 |
|
21,667 |
|
||
|
Deferred income taxes |
|
14,568 |
|
15,815 |
|
||
|
|
|
286,790 |
|
257,181 |
|
||
|
|
|
|
|
|
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||
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STOCKHOLDERS’ EQUITY |
|
|
|
|
|
||
|
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|
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|
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|
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Preferred stock, $.01 par, 1,934,783 shares authorized, no shares outstanding |
|
|
|
|
|
||
|
Common stock, $.01 par value; 50,000,000 shares authorized, 28,871,144 and 29,051,281 issued and outstanding, respectively |
|
289 |
|
291 |
|
||
|
Additional paid-in capital |
|
51,501 |
|
52,478 |
|
||
|
Retained earnings |
|
208,837 |
|
213,745 |
|
||
|
Total stockholders’ equity |
|
260,627 |
|
266,514 |
|
||
|
|
|
|
|
|
|
||
|
Total liabilities and stockholders’ equity |
|
$ |
547,417 |
|
$ |
523,695 |
|
3
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited: dollars in thousands, except share and per share data)
|
|
|
Quarter Ended |
|
Six-Months Ended |
|
||||||||
|
|
|
June 29, |
|
June 28, |
|
June 29, |
|
June 28, |
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||||
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|
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||||
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Net sales |
|
$ |
313,742 |
|
$ |
268,361 |
|
$ |
607,342 |
|
$ |
541,935 |
|
|
Cost of sales |
|
272,513 |
|
241,108 |
|
528,368 |
|
481,076 |
|
||||
|
Gross profit |
|
41,229 |
|
27,253 |
|
78,974 |
|
60,859 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
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Selling, general and administrative expenses |
|
22,505 |
|
25,744 |
|
43,671 |
|
51,393 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
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Operating income |
|
18,724 |
|
1,509 |
|
35,303 |
|
9,466 |
|
||||
|
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|
|
|
|
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|
|
|
||||
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Other income, net |
|
2 |
|
232 |
|
43 |
|
438 |
|
||||
|
Interest expense |
|
(669 |
) |
(779 |
) |
(1,367 |
) |
(1,791 |
) |
||||
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|
|
|
|
|
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|
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||||
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Income before income taxes |
|
18,057 |
|
962 |
|
33,979 |
|
8,113 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
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Provision for income taxes |
|
7,087 |
|
380 |
|
13,336 |
|
3,205 |
|
||||
|
|
|
|
|
|
|
|
|
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||||
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Net income |
|
$ |
10,970 |
|
$ |
582 |
|
$ |
20,643 |
|
$ |
4,908 |
|
|
|
|
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||||
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Earnings per common share: |
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|
|
|
|
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|
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||||
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Basic |
|
$ |
.38 |
|
$ |
.02 |
|
$ |
.72 |
|
$ |
.17 |
|
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Diluted |
|
$ |
.37 |
|
$ |
.02 |
|
$ |
.70 |
|
$ |
.17 |
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||||
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Weighted average common shares outstanding: |
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|
|
|
|
|
|
|
|
||||
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Basic |
|
28,807,792 |
|
29,027,603 |
|
28,760,396 |
|
28,992,255 |
|
||||
|
Diluted |
|
29,660,847 |
|
29,469,777 |
|
29,642,792 |
|
29,405,286 |
|
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4
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited: dollars in thousands)
|
|
|
Six-Months Ended |
|
||||
|
|
|
June 29, |
|
June 28, 2003 |
|
||
|
|
|
|
|
|
|
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Increase (Decrease) in Cash: |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
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Cash flows from operating activities: |
|
|
|
|
|
||
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Net income |
|
$ |
20,643 |
|
$ |
4,908 |
|
|
Adjustments to reconcile net income to net cash provided (used) by operating activities: |
|
|
|
|
|
||
|
Loss on sale of assets |
|
0 |
|
287 |
|
||
|
Depreciation and amortization |
|
4,010 |
|
4,677 |
|
||
|
Deferred income taxes |
|
4,030 |
|
2,158 |
|
||
|
Changes in working capital accounts: |
|
|
|
|
|
||
|
Trade receivables, net |
|
(39,301 |
) |
11,857 |
|
||
|
Inventories |
|
(24,105 |
) |
14,433 |
|
||
|
Resort lot inventory |
|
|
|
4,261 |
|
||
|
Prepaid expenses |
|
(2,992 |
) |
80 |
|
||
|
Accounts payable |
|
21,198 |
|
(10,659 |
) |
||
|
Product liability reserve |
|
568 |
|
169 |
|
||
|
Product warranty reserve |
|
2,081 |
|
(2,416 |
) |
||
|
Income taxes payable |
|
6,317 |
|
(4,536 |
) |
||
|
Accrued expenses and other liabilities |
|
6,304 |
|
(1,088 |
) |
||
|
Net cash provided (used) by operating activities |
|
(1,247 |
) |
24,131 |
|
||
|
Cash flows from investing activities: |
|
|
|
|
|
||
|
Additions to property, plant and equipment |
|
(6,797 |
) |
(14,272 |
) |
||
|
Proceeds from sale of assets |
|
13 |
|
1,789 |
|
||
|
Issuance of notes receivable |
|
(13 |
) |
0 |
|
||
|
|
|
|
|
|
|
||
|
Net cash used in investing activities |
|
(6,797 |
) |
(12,483 |
) |
||
|
|
|
|
|
|
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Cash flows from financing activities: |
|
|
|
|
|
||
|
Book overdraft |
|
10,869 |
|
5,968 |
|
||
|
(Payments) borrowings on lines of credit, net |
|
1,000 |
|
(9,628 |
) |
||
|
Payments on long-term notes payable |
|
(5,000 |
) |
(8,666 |
) |
||
|
Debt issuance costs |
|
|
|
(301 |
) |
||
|
Issuance of common stock |
|
1,175 |
|
979 |
|
||
|
|
|
|
|
|
|
||
|
Net cash provided (used) by financing activities |
|
8,044 |
|
(11,648 |
) |
||
|
|
|
|
|
|
|
||
|
Net change in cash |
|
0 |
|
0 |
|
||
|
Cash at beginning of period |
|
0 |
|
0 |
|
||
|
|
|
|
|
|
|
||
|
Cash at end of period |
|
$ |
0 |
|
$ |
0 |
|
5