NEWS RELEASE
For immediate release Friday, January 12, 2001
COACHMEN INDUSTRIES WILL REPORT A LOSS IN FOURTH QUARTER; PROFIT FOR THE YEAR
ELKHART, INDIANA--Coachmen Industries, Inc. (NYSE: COA) announced today that it
will report a loss for the fourth quarter ending December 31, 2000, though the
company will remain profitable for the year. The fourth quarter performance is
due to the company's recreational vehicle (RV) segment that continues to
struggle with market conditions affecting the RV industry. Increases in interest
rates, high fuel prices, dealer inventory adjustments and reduced consumer
confidence began to impact RV industry shipments last summer, and continued to
do so through the fourth quarter. Coachmen's other core business, the modular
segment, has remained profitable.
RECREATIONAL VEHICLE SEGMENT
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In light of the challenging conditions in the RV market and anticipated
continuing softness during the first half of 2001, Coachmen has taken several
proactive steps to gain efficiencies and reduce expenses. During the fourth
quarter, Coachmen RV Company consolidated production from its Oregon travel
trailer plant into two Indiana facilities, and also consolidated production of
its class A motorhomes into one facility in Middlebury, Indiana. Prodesign, the
plastics company, has also consolidated into fewer facilities.
Consistent with its strategic plan to improve efficiencies and asset
utilization, earlier Georgie Boy Manufacturing completed a consolidation of its
Indiana diesel motorhome production into its Michigan complex. Shasta Industries
was consolidated into Coachmen RV Company, and the RV Group has been reorganized
to better leverage efficiencies. As previously announced, the company also
exited the furniture industry with its sale of the Lux Company. And, the company
has also exited RV retailing, with the exception of two stores that will be
retained for R&D and regional service purposes. All of the remaining stores were
closed and liquidated during the fourth quarter at a greater than anticipated
loss.
In spite of the difficult RV market, Coachmen is pleased with the orders
received at the National Trade Show in Louisville, Kentucky held in late
November. During the show, Coachmen RV Company introduced two new travel trailer
and fifth wheel product lines. The Cascade(TM), is targeted to entry-level
buyers and the Ultra-Lite(TM), is positioned to capture the lightweight market.
The company also introduced two innovative new class A motorhome lines: the
Aurora(TM), a mid-range gas powered product and the Cross
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Country(TM), an affordable diesel-powered motorhome positioned to appeal to the
important and growing segment of diesel buyers. Due to the success of these new
models, and the strong acceptance of the complete line-up of 2001 product
offerings, dealer orders were measurably ahead of the previous year.
Also at the National Trade Show, the company introduced a wholesale financing
program with Transamerica Distribution Finance exclusively available for dealers
of Coachmen Industries products. This new program offers Coachmen and its
qualifying dealers a strong marketing advantage.
"Coachmen continues to be dedicated to meeting customer's needs and dealer
requirements in light of these soft market conditions," noted Claire C. Skinner,
Chairman, CEO and President of Coachmen Industries. "We have been and will
continue to be responsive to these changing conditions and focused on meeting
and enhancing stakeholder and shareholder value."
MODULAR SEGMENT
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The modular segment continued its profitable performance during the fourth
quarter and has a backlog of orders. The more favorable growth and profit
opportunities in the modular segment underscore the strategic plan of the
company to actively seek growth opportunities in this core business. Earlier in
the year, Coachmen expanded its modular segment with the purchase of Mod-U-Kraf,
a Rocky Mount, Virginia modular homebuilder. During the fourth quarter, the
company completed its acquisition of Miller Building Systems, an Elkhart,
Indiana company that concentrates on telecommunications and commercial modular
structures. In November the company signed a proposal to purchase KanBuild,
Inc., an established modular homebuilder with plants in Kansas and Colorado.
KanBuild would become part of the company's All American Homes subsidiary, the
nation's largest modular home producer. In December, the company and KanBuild
reached a definitive agreement, and subject to remaining due diligence, the
company expects this acquisition to be completed during the first quarter of
2001. These acquisitions meet the company's criteria of being accretive to
earnings, and support the company's goal of bringing a balance between its two
core businesses.
"While the fourth quarter was especially challenging, Coachmen continues to have
a strong balance sheet," said James E. Jack, Executive Vice President and Chief
Financial Officer. "We continue to make significant progress with our strategic
plan to improve asset utilization and efficiencies and we will continue to look
for ways to grow our two core businesses, RVs and modular construction."
Coachmen Industries, Inc., founded in 1964, is one of the nation's leading
full-line manufacturers of recreational vehicles. The company is also a leader
in modular construction. Coachmen is one of the industry's best-known brand
names of RVs and All American Homes, one of the company's modular subsidiaries,
is America's leading
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Page 3: Coachmen Will Report Loss in 4th Quarter
producer of modular homes. Coachmen is a publicly held company with stock listed
on the New York Stock Exchange (NYSE) under the COA ticker symbol.
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned not to
place undue reliance on forward-looking statements, which are inherently
uncertain. Actual results may differ materially from that projected or suggested
due to certain risks and uncertainties including, but not limited to the
potential fluctuations in the company's operating results, the implementation of
its enterprise-wide software, the availability and pricing of gasoline, the
company's dependence on chassis suppliers, interest rates, competition,
government regulations, legislation governing the relationships of the company
with its recreational vehicle dealers, the impact of economic uncertainty on
high-cost discretionary product purchases and other risks identified in the
company's SEC filings.
For more information:
James E. Jack, Executive Vice President and Chief Financial Officer
219-262-0123
[email protected]
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James O. Baxter, Vice President of Communications
219-262-0123
[email protected]
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