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
THIRD QUARTER 2003 RESULTS
COBURG, Oregon, October 21, 2003 — Monaco Coach Corporation (NYSE: MNC) today reported revenue and earnings for its third quarter ended September 27, 2003. Third quarter earnings per share were 21 cents, on third quarter revenue of $303.2 million. Net income for the third quarter was $6.3 million. Operating income for the third quarter was $11.1 million. Third quarter unit sales of Monaco Coach Corporation products were 2,436 units. Third quarter motorhome sales totaled 1,751 units and third quarter towable recreational vehicles totaled 685 units.
For the nine months ended September 27, 2003, earnings per share were 38 cents on revenue of $845.1 million. Net income for the nine months ended September 27, 2003 was $11.2 million. Operating income for the nine months ended September 27, 2003 was $20.5 million. Unit sales of Monaco Coach Corporation products for the nine months ended September 27, 2003 totaled 7,063 units. Nine-month motorhome sales totaled 5,157 units and nine-month towable recreational vehicles totaled 1,906 units.
According to Monaco Coach Corporation Chairman and Chief Executive Officer Kay Toolson, “The retail market remained strong throughout the third quarter, and our retail dealer partners responded with increased orders, resulting in better than anticipated revenue. Combined with the successful reduction in our finished goods inventory, this positive sales environment is allowing us to gradually increase our overall production rates.”
Toolson continued, “Our 2003 and 2004 models retailed well during the third quarter. We remained aggressive in terms of retail promotions to help move 2003 products throughout the quarter. Our retail dealers’ inventories fell again in the third quarter as retail sales outpaced wholesale shipments.”
Monaco Coach Corporation President John Nepute added, “We expect fourth quarter 2003 revenues in the range of $290 million to $300 million, due in part to holiday time off in the fourth quarter. As we increase production rates, we will continue to regain gross margins. Our goal is to achieve fourth quarter 2003 gross margins of approximately 12% to 12.5%. As retail promotions
expire, we intend to reduce our sales, general and administrative expenses to between 8% and 8.25% of revenue in the fourth quarter 2003.”
Monaco Coach Corporation Vice President and Chief Financial Officer Marty Daley stated, “We worked hard to improve our balance sheet in the third quarter of 2003. Our overall borrowings at the end of the third quarter 2003 fell to $32.5 million, down from $85 million at the end of the second quarter 2003. Our overall debt reduction was helped in part by a $6.5 million reduction related to the sale of the undeveloped Naples, Florida property we acquired from Outdoor Resorts of America. Our finished goods inventory fell to $20.9 million at the end of the third quarter 2003, down from $46.5 million at the end of the second quarter 2003.”
Daley continued, “We currently expect 2004 revenue to be approximately $1.2 to $1.26 billion. We believe we can increase our gross margins to approximately 13.5%, and reduce our sales, general and administrative expenses to 7.25% of revenue by the end of 2004.”
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 fourth quarter 2003 and fiscal year 2004 expectations for 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
91320 Industrial Way, Coburg, OR 97408 | P 545 686 8011 | 800 634 0855 | F 541 681 8899 | www.monaco-online.com
2
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited: dollars in thousands, except share and per share data)
|
|
|
December
28, |
|
September
27, |
|
||
|
ASSETS |
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
|
||
|
Trade receivables, net |
|
$ |
116,647 |
|
$ |
105,949 |
|
|
Inventories |
|
175,609 |
|
132,142 |
|
||
|
Resort lot inventory |
|
26,883 |
|
14,972 |
|
||
|
Prepaid expenses |
|
3,612 |
|
2,880 |
|
||
|
Deferred income taxes |
|
33,379 |
|
33,047 |
|
||
|
Total current assets |
|
356,130 |
|
288,990 |
|
||
|
|
|
|
|
|
|
||
|
Property, plant, and equipment, net |
|
135,350 |
|
141,669 |
|
||
|
Debt issuance costs net of accumulated amortization of $389, and $686, respectively |
|
683 |
|
690 |
|
||
|
Goodwill, net of accumulated amortization of $5,320 and $5,320, respectively |
|
55,254 |
|
55,254 |
|
||
|
Total assets |
|
$ |
547,417 |
|
$ |
486,603 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES |
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
|
||
|
Book overdraft |
|
$ |
3,518 |
|
$ |
4,724 |
|
|
Line of credit |
|
51,413 |
|
0 |
|
||
|
Current portion of long-term note payable |
|
21,667 |
|
15,500 |
|
||
|
Accounts payable |
|
78,055 |
|
77,504 |
|
||
|
Product liability reserve |
|
21,322 |
|
20,626 |
|
||
|
Product warranty reserve |
|
31,745 |
|
28,976 |
|
||
|
Income taxes payable |
|
4,536 |
|
2,096 |
|
||
|
Accrued expenses and other liabilities |
|
29,633 |
|
30,013 |
|
||
|
Total current liabilities |
|
241,889 |
|
179,439 |
|
||
|
|
|
|
|
|
|
||
|
Long-term note payable |
|
30,333 |
|
17,000 |
|
||
|
Deferred income taxes |
|
14,568 |
|
16,932 |
|
||
|
|
|
286,790 |
|
213,371 |
|
||
|
|
|
|
|
|
|
||
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
||
|
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 29,093,637 issued and outstanding, respectively |
|
289 |
|
291 |
|
||
|
Additional paid-in capital |
|
51,501 |
|
52,934 |
|
||
|
Retained earnings |
|
208,837 |
|
220,007 |
|
||
|
Total stockholders’ equity |
|
260,627 |
|
273,232 |
|
||
|
Total liabilities and stockholders’ equity |
|
$ |
547,417 |
|
$ |
486,603 |
|
3
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited: dollars in thousands, except share and per share data)
|
|
|
Quarter Ended |
|
Nine-Months Ended |
|
||||||||
|
|
|
September 28, |
|
September 27, |
|
September 28, |
|
September 27, |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
314,680 |
|
$ |
303,178 |
|
$ |
922,022 |
|
$ |
845,113 |
|
|
Cost of sales |
|
271,863 |
|
266,458 |
|
800,230 |
|
747,534 |
|
||||
|
Gross profit |
|
42,817 |
|
36,720 |
|
121,792 |
|
97,579 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Selling, general, and administrative expenses |
|
22,783 |
|
25,667 |
|
66,455 |
|
77,060 |
|
||||
|
Operating income |
|
20,034 |
|
11,053 |
|
55,337 |
|
20,519 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Other income, net |
|
3 |
|
64 |
|
47 |
|
502 |
|
||||
|
Interest expense |
|
(633 |
) |
(767 |
) |
(2,000 |
) |
(2,558 |
) |
||||
|
Income before income taxes |
|
19,404 |
|
10,350 |
|
53,384 |
|
18,463 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Provision for income taxes |
|
7,616 |
|
4,088 |
|
20,953 |
|
7,293 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income |
|
$ |
11,788 |
|
$ |
6,262 |
|
$ |
32,431 |
|
$ |
11,170 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
.41 |
|
$ |
.22 |
|
$ |
1.13 |
|
$ |
.38 |
|
|
Diluted |
|
$ |
.40 |
|
$ |
.21 |
|
$ |
1.10 |
|
$ |
.38 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
28,859,515 |
|
29,080,716 |
|
28,793,435 |
|
29,021,742 |
|
||||
|
Diluted |
|
29,527,539 |
|
29,625,959 |
|
29,604,369 |
|
29,478,842 |
|
||||
4
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited: dollars in thousands)
|
|
|
Nine-Months Ended |
|
||||
|
|
|
September 28, |
|
September 27, |
|
||
|
|
|
|
|
|
|
||
|
Increase (Decrease) in Cash: |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Cash flows from operating activities: |
|
|
|
|
|
||
|
Net income |
|
$ |
32,431 |
|
$ |
11,170 |
|
|
Adjustments to reconcile net income to net cash (used) provided by operating activities: |
|
|
|
|
|
||
|
Loss on sale of assets |
|
164 |
|
20 |
|
||
|
Depreciation and amortization |
|
6,364 |
|
7,202 |
|
||
|
Deferred income taxes |
|
(1,511 |
) |
4,297 |
|
||
|
Changes in working capital accounts: |
|
|
|
|
|
||
|
Trade receivables, net |
|
(28,668 |
) |
11,075 |
|
||
|
Inventories |
|
(40,468 |
) |
43,467 |
|
||
|
Resort lot inventory |
|
|
|
4,712 |
|
||
|
Prepaid expenses |
|
(2,582 |
) |
724 |
|
||
|
Accounts payable |
|
30,045 |
|
(551 |
) |
||
|
Product liability reserve |
|
4,069 |
|
(696 |
) |
||
|
Product warranty reserve |
|
1,368 |
|
(2,769 |
) |
||
|
Income taxes payable |
|
13,234 |
|
(2,440 |
) |
||
|
Accrued expenses and other liabilities |
|
11,043 |
|
633 |
|
||
|
Net cash provided by operating activities |
|
25,489 |
|
76,844 |
|
||
|
Cash flows from investing activities: |
|
|
|
|
|
||
|
Additions to property, plant, and equipment |
|
(13,055 |
) |
(16,969 |
) |
||
|
Proceeds from sale of assets |
|
384 |
|
2,051 |
|
||
|
Proceeds from sale of Naples property |
|
|
|
6,650 |
|
||
|
Issuance of notes receivable |
|
312 |
|
|
|
||
|
Net cash used in investing activities |
|
(12,359 |
) |
(8,268 |
) |
||
|
Cash flows from financing activities: |
|
|
|
|
|
||
|
Book overdraft |
|
3,923 |
|
1,206 |
|
||
|
Payments on lines of credit, net |
|
(11,196 |
) |
(51,413 |
) |
||
|
Payments on long-term notes payable |
|
(7,500 |
) |
(19,500 |
) |
||
|
Debt issuance costs |
|
|
|
(304 |
) |
||
|
Issuance of common stock |
|
1,643 |
|
1,435 |
|
||
|
Net cash used by financing activities |
|
(13,130 |
) |
(68,576 |
) |
||
|
Net change in cash |
|
0 |
|
0 |
|
||
|
Cash at beginning of period |
|
0 |
|
0 |
|
||
|
Cash at end of period |
|
$ |
0 |
|
$ |
0 |
|
5