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EXHIBIT 99.1
NEWS
FOR IMMEDIATE RELEASE
Contact: Joseph P. Tomczak
Chief Financial Officer
(817) 885-0000
KEVCO REPORTS THIRD QUARTER RESULTS
FORT WORTH, TEXAS (NOV. 20, 2000) - Kevco, Inc. (Nasdaq/NM:KVCO) today reported
results for the third quarter and nine months ended September 30, 2000.
Net sales for the three months totaled $137.0 million, compared with
$208.7 million in the year-earlier period. The Company reported a net loss for
the third quarter of $9.3 million, or $0.98 per share, compared with a net loss
of $26.0 million or $2.94 per share, including one-time charges of $21.5 million
or $2.44 per share, in the year-earlier period.
For the first nine months of 2000, net sales totaled $470.7 million,
compared with $663.2 million in the year-earlier period. The Company reported a
net loss for the nine months of $16.1 million, or $1.69 per share, compared with
a net loss of $27.9 million, or $3.71 per share, including one-time charges of
$21.5 million or $2.86 per share, in the first nine months of 1999.
Fred Hegi, chairman of the board, president and chief executive
officer, commented, "The significant decline in our net sales from $166.9
million in the second quarter to $137.0 million in the third period underscores
the further weakening that has occurred within all levels of the manufactured
housing industry. A drastic reduction in credit availability for potential
purchasers of manufactured housing and a proliferation of repossessions have
aggravated the decline in retail sales that began during the first quarter.
Indications are that retail demand for new units is now running more than 20%
below a year ago. Coupled with the excessive retail inventories that were
present industry-wide at the start of the year, the decline in retail sales has
led to the estimated closing of more than one of every five manufacturing
facilities and much lower production volume at many still open. More contraction
in capacity seems likely before we start to see any sustained improvement in
what remains a fundamentally sound industry with a clearly defined role in
helping to meet the nation's housing needs."
Hegi added, "The severity of the industry's difficulties has caused a
significant variance in our financial planning thus far this year. We have had
no borrowings, however, under our revolving credit agreement since September of
1999 and still expect to have a positive cash flow for 2000, based on the
benefits expected from the actions taken to reduce costs and improve working
capital, and barring declines in industry production that are more than we
anticipate. We continue to work closely with our bank group and recently
completed an amended lending agreement with which we are in full compliance.
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Kevco, Inc. Reports Third Quarter Results
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November 20, 2000
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"Kevco remains an important partner in the basic flow of products from
suppliers to manufactured home producers. Our strategic focus is continuous
enhancement of the value we bring to this supply chain. In September, we
completed the successful conversion, on schedule and within budget, to a single
information system connecting our nation-wide network of distribution centers.
Having a single systems platform in our distribution facilities is already
increasing our efficiency and service levels and is enabling us to address the
heightened pressures of the current industry environment by streamlining other
administrative functions. We expect to realize annualized savings of more than
$2 million from these synergies. We have also rationalized our geographical
coverage and expect to start 2001 with 24 distribution facilities, down from 34
at the start of this year."
Kevco, headquartered in Fort Worth, Texas, is a leading wholesale
distributor and manufacturer of building products for the manufactured housing
and recreational vehicle industries.
This press release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include those relating to implementation of the
Company's cost improvement and operating efficiency initiatives, the effect of
installation of a new information system, the outlook for and advantages of
manufactured housing and includes statements relating to the Company or its
operations that include terms such as "expects," "believes," "anticipates,"
"intends," "goals" and similar expressions. Forward-looking statements are not
guarantees of future performance and involve risks and uncertainties. The
Company's actual results, performance and achievements could differ materially
from the results, performance or achievements expressed in, or implied by, these
forward-looking statements as a result of various factors, including without
limitation, the Company's substantial leverage and its effects on the Company's
ability to obtain additional capital as needed, the adequacy of existing funds
to meet liquidity needs, the Company's ability to integrate its operations and
realize savings from the implementation of its new management information
systems, the realization of savings from plant consolidations and staff
reduction; the ability of the manufactured housing industry to reduce inventory,
customer demand for manufactured housing and recreational vehicles, the effect
of general economic conditions, including increasing interest rates, the
availability of financing for manufactured housing consumers and the impact of
raw materials prices. This press release speaks as of the date it is released.
The Company does not intend to, and does not undertake to, update information
contained in this press release absent an express obligation to do so in
connection with required filings under Federal securities laws. A description of
these factors, as well as other factors which could affect the Company's
business, is set forth in filings by the Company with the Securities and
Exchange Commission, including the Company's Form 10-K for the year ended
December 31, 1999 and Form 10-Q for the quarter ended September 30, 2000.
KEVCO, INC.
CONDENSED CONSOLIDATED FINANCIAL RESULTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, SEPT. 30,
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 137,030 $ 208,682 $ 470,682 $ 663,244
Net (loss) $ (9,341) $ (25,971) $ (16,140) $ (27,941)
(Loss) per share - basic and diluted $ (0.98) $ (2.94) $ (1.69) $ (3.71)
Weighted average shares outstanding -
basic and diluted 9,563 8,828 9,563 7,523
</TABLE>
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Kevco, Inc. Reports Third Quarter Results
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November 20, 2000
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KEVCO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, SEPT. 30,
--------------------------- ---------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 137,030 $ 208,682 $ 470,682 $ 663,244
Gross margin 17,143 19,614 62,483 79,436
12.5% 9.4% 13.3% 11.9%
Selling, general and administrative expenses 20,724 27,866 61,846 79,709
15.1% 13.4% 13.1% 12.0%
Impairment and other special charges -- 6,807 -- 6,807
Operating income (3,581) (15,059) 637 (7,080)
(2.6%) (7.3%) 0.2% (1.1%)
Other income (expense) (3) 1,547 102 2,421
Debt transaction costs -- 6,272 -- 6,272
Interest expense 5,757 6,187 16,879 17,796
Loss before income taxes (25,971) (16,140) (28,727)
(9,341)
Income tax expense (benefit) -- -- -- (786)
Net loss $ (9,341) $ (25,971) $ (16,140) $ (27,941)
Loss per share - basic and diluted $ (0.98) $ (2.94) $ (1.69) $ (3.71)
Weighted average shares outstanding -
basic and diluted 9,563 8,828 9,563 7,523
</TABLE>
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