Exhibit 99.1
FOR MORE INFORMATION CONTACT:
Craig Wanichek – Investor Relations
Monaco Coach Corporation
(541) 686-8011
http://www.monaco-online.com/
MONACO COACH CORPORATION REPORTS
THIRD QUARTER 2004 RESULTS
COBURG, Oregon - October 27, 2004 - Monaco Coach Corporation (NYSE: MNC) today reported revenue and earnings for its third quarter ended October 2, 2004. Third quarter earnings per share were 25 cents, 19% higher than last year’s third quarter earnings of 21 cents. Revenues for the third quarter were a record $358.9 million, 18.4% ahead of last year’s third quarter revenue of $303.2 million. Net income for the third quarter was $7.4 million, an 18.8% increase compared to $6.3 million for the third quarter last year. Third quarter 2004 motorhome sales totaled 2,110 units and third quarter towable sales totaled 1,254 units for a total of 3,364.
Earnings per share, on a diluted basis, for the nine-months ended October 2, 2004 were $1.04 compared to 38 cents per share for the same period last fiscal year. Revenues for the nine-months ended October 2, 2004 were $1.072 billion, a 26.9% increase over revenues for the first nine-months of last year. Net income for the nine-months ended October 2, 2004 was $31.3 million, a 180% increase compared to $11.1 million earned for the comparable period last year. Unit sales of Monaco Coach Corporation products for the nine-months ended October 2, 2004 totaled 9,847 units. Nine-month motorhome sales totaled 6,377 units and nine-month towable recreational vehicles totaled 3,470 units.
“While we are pleased to report that the Company achieved record revenue for the third straight quarter, competition in the motorhome industry remains very intense,” stated Monaco Coach Corporation Chairman and Chief Executive Officer Kay Toolson. “Our earnings in the third quarter reflect these difficult market conditions. The financial results for the quarter emphasize the need to address some tough challenges such as higher selling, general and administrative costs, discounting and production levels.”
John Nepute, Monaco President, stated, “The Company’s gross profit margin was impacted by a product mix shift as well as not realizing our forecast reduction in the level of wholesale discounting. Discounting and retail incentives were used to help discourage a build-up of finished goods inventory and support our dealer partners in retailing their inventory.”
“The Company has reduced production and run-rates to reflect the softer retail market and weakness in specific brands,” Nepute said. “The reduction should lessen our reliance on discounts and incentives.”
Monaco Coach Vice President and Chief Financial Officer, Marty Daley said, “Reducing selling, general and administrative expenses as a percentage of revenues is a significant focus for the Company. We expect these adjustments will be realized ratably over the next few quarters.”
(more)
“We expect that a combination of reduced run-rates and fewer production days in the fourth quarter will generate fourth quarter revenues of approximately $300 - $310 million. This lower plant utilization level should lead to fourth quarter gross margins between 10.4% and 10.7%. Sales, general, and administrative expenses for the fourth quarter are expected to be in the 7.8% to 8.0% range,” said Daley.
Monaco Coach Corporation will conduct a conference call in conjunction with this release at 2 p.m. ET today, Wednesday, October 27, 2004. Members of the news media, investors, and the general public are invited to access a live broadcast of the conference call via the Investor Relations page of the Company’s website at www.monaco-online.com. The event will be archived and available for replay for the next 90 days.
Headquartered in Coburg, Oregon, with additional manufacturing facilities in Central Oregon and Indiana, Monaco Coach Corporation is one of the nation’s leading manufacturers of recreational vehicles. The Company manufactures luxury recreational vehicle models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie and Royale Coach brand names.
The statements above regarding SG &A cost reductions, reduction of discounting, the Company’s ability to decrease production rates, and the Company’s revenue, gross margin and sales, general, and administrative expenses guidance for the fourth quarter of 2004 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 2003, and the 2003 Annual Report to Shareholders for additional factors. These filings can be accessed over the Internet at http:www.sec.gov
(tables to follow)
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited: dollars in thousands, except share and per share data)
|
|
|
January 3, |
|
October 2, |
|
||
|
ASSETS |
|
|
|
|
|
||
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Current assets: |
|
|
|
|
|
||
|
Cash |
|
$ |
13,398 |
|
$ |
8,406 |
|
|
Trade receivables, net |
|
89,170 |
|
129,314 |
|
||
|
Inventories |
|
127,746 |
|
162,595 |
|
||
|
Resort lot inventory |
|
13,978 |
|
8,241 |
|
||
|
Prepaid expenses |
|
3,029 |
|
5,700 |
|
||
|
Deferred income taxes |
|
33,836 |
|
33,650 |
|
||
|
Total current assets |
|
281,157 |
|
347,906 |
|
||
|
|
|
|
|
|
|
||
|
Property, plant, and equipment, net |
|
141,662 |
|
138,928 |
|
||
|
Debt issuance costs net of accumulated amortization of $815, and $1,200, respectively |
|
596 |
|
277 |
|
||
|
Goodwill |
|
55,254 |
|
55,254 |
|
||
|
Total assets |
|
$ |
478,669 |
|
$ |
542,365 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES |
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
|
||
|
Current portion of long-term note payable |
|
$ |
15,000 |
|
$ |
15,000 |
|
|
Accounts payable |
|
64,792 |
|
96,328 |
|
||
|
Product liability reserve |
|
20,723 |
|
20,595 |
|
||
|
Product warranty reserve |
|
29,643 |
|
34,027 |
|
||
|
Income taxes payable |
|
3,395 |
|
6,826 |
|
||
|
Accrued expenses and other liabilities |
|
26,373 |
|
32,635 |
|
||
|
Total current liabilities |
|
159,926 |
|
205,411 |
|
||
|
|
|
|
|
|
|
||
|
Long-term note payable |
|
15,000 |
|
3,750 |
|
||
|
Deferred income taxes |
|
17,495 |
|
18,141 |
|
||
|
|
|
192,421 |
|
227,302 |
|
||
|
|
|
|
|
|
|
||
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
||
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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, 29,246,143 and 29,414,436 issued and outstanding, respectively |
|
292 |
|
294 |
|
||
|
Additional paid-in capital |
|
54,919 |
|
56,829 |
|
||
|
Retained earnings |
|
231,037 |
|
257,940 |
|
||
|
Total stockholders’ equity |
|
286,248 |
|
315,063 |
|
||
|
Total liabilities and stockholders’ equity |
|
$ |
478,669 |
|
$ |
542,365 |
|
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited: dollars in thousands, except share and per share data)
|
|
|
Quarter Ended |
|
Nine-Months Ended |
|
||||||||
|
|
|
September 27, |
|
October 2, |
|
September 27, |
|
October 2, |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
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Net sales |
|
$ |
303,178 |
|
$ |
358,869 |
|
$ |
845,113 |
|
$ |
1,071,619 |
|
|
Cost of sales |
|
266,458 |
|
315,454 |
|
747,534 |
|
938,073 |
|
||||
|
Gross profit |
|
36,720 |
|
43,415 |
|
97,579 |
|
133,546 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Selling, general, and administrative expenses |
|
25,667 |
|
31,036 |
|
77,060 |
|
82,556 |
|
||||
|
Operating income |
|
11,053 |
|
12,379 |
|
20,519 |
|
50,990 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Other income, net |
|
64 |
|
43 |
|
502 |
|
256 |
|
||||
|
Interest expense |
|
(767 |
) |
(370 |
) |
(2,558 |
) |
(1,147 |
) |
||||
|
Income before income taxes |
|
10,350 |
|
12,052 |
|
18,463 |
|
50,099 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Provision for income taxes |
|
4,088 |
|
4,616 |
|
7,293 |
|
18,792 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income |
|
$ |
6,262 |
|
$ |
7,436 |
|
$ |
11,170 |
|
$ |
31,307 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
.22 |
|
$ |
.25 |
|
$ |
.38 |
|
$ |
1.07 |
|
|
Diluted |
|
$ |
.21 |
|
$ |
.25 |
|
$ |
.38 |
|
$ |
1.04 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
29,080,716 |
|
29,410,086 |
|
29,021,742 |
|
29,354,598 |
|
||||
|
Diluted |
|
29,625,959 |
|
29,962,722 |
|
29,478,842 |
|
29,981,063 |
|
||||
4
MONACO COACH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited: dollars in thousands)
|
|
|
Nine-Months Ended |
|
||||
|
|
|
September 27, |
|
October 2, |
|
||
|
|
|
|
|
|
|
||
|
Increase (Decrease) in Cash: |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Cash flows from operating activities: |
|
|
|
|
|
||
|
Net income |
|
$ |
11,170 |
|
$ |
31,307 |
|
|
Adjustments to reconcile net income to net cash (used) provided by operating activities: |
|
|
|
|
|
||
|
Loss on sale of assets |
|
20 |
|
240 |
|
||
|
Depreciation and amortization |
|
7,202 |
|
8,029 |
|
||
|
Deferred income taxes |
|
4,297 |
|
832 |
|
||
|
Changes in working capital accounts: |
|
|
|
|
|
||
|
Trade receivables, net |
|
11,075 |
|
(40,144 |
) |
||
|
Inventories |
|
43,467 |
|
(34,849 |
) |
||
|
Resort lot inventory |
|
4,712 |
|
5,737 |
|
||
|
Prepaid expenses |
|
724 |
|
(2,679 |
) |
||
|
Accounts payable |
|
(551 |
) |
31,536 |
|
||
|
Product liability reserve |
|
(696 |
) |
(128 |
) |
||
|
Product warranty reserve |
|
(2,769 |
) |
4,384 |
|
||
|
Income taxes payable |
|
(2,440 |
) |
3,431 |
|
||
|
Accrued expenses and other liabilities |
|
633 |
|
6,262 |
|
||
|
Net cash provided by operating activities |
|
76,844 |
|
13,958 |
|
||
|
Cash flows from investing activities: |
|
|
|
|
|
||
|
Additions to property, plant, and equipment |
|
(16,969 |
) |
(7,069 |
) |
||
|
Proceeds from the sale of assets |
|
2,051 |
|
1,927 |
|
||
|
Proceeds from the sale of Naples property |
|
6,650 |
|
0 |
|
||
|
Net cash used in investing activities |
|
(8,268 |
) |
(5,142 |
) |
||
|
Cash flows from financing activities: |
|
|
|
|
|
||
|
Book overdraft |
|
1,206 |
|
0 |
|
||
|
Payments on lines of credit, net |
|
(51,413 |
) |
0 |
|
||
|
Payments on long-term notes payable |
|
(19,500 |
) |
(11,250 |
) |
||
|
Debt issuance costs |
|
(304 |
) |
(66 |
) |
||
|
Dividends paid |
|
|
|
(4,404 |
) |
||
|
Issuance of common stock |
|
1,435 |
|
1,912 |
|
||
|
Net cash used by financing activities |
|
(68,576 |
) |
(13,808 |
) |
||
|
Net change in cash |
|
0 |
|
(4,992 |
) |
||
|
Cash at beginning of period |
|
0 |
|
13,398 |
|
||
|
|
|
|
|
|
|
||
|
Cash at end of period |
|
$ |
0 |
|
$ |
8,406 |
|
5