FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly period ended March 31, 1999
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ........ to .........
Commission file number: 0-22268
NATIONAL R.V. HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0371079
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3411 N. Perris Blvd.
Perris, California 92571
(909) 943-6007
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO__
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at April 30, 1999
- ----- -----------------------------
Common stock, par value 10,367,875
$.01 per share
1
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
INDEX
PAGE
PART 1 - FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheet -
March 31, 1999 and December 31, 1998 3
Consolidated Statement of Income -
Three Months Ended March 31, 1999 and 1998 4
Consolidated Statement of Cash Flows -
Three Months Ended March 31, 1999 and 1998 5
Consolidated Statement of Changes in Stockholders' Equity 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Signature 12
2
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(In thousands except shares)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
(Unaudited)
ASSETS
Current Assets:
<S> <C> <C>
Cash $ 29,434 $ 10,446
Trade receivables, less allowance for
doubtful accounts of $188 24,969 20,719
Inventories 45,064 46,832
Deferred income taxes 4,083 3,883
Prepaid expenses 694 809
---------------- ------------------
Total current assets 104,244 82,689
Goodwill - net 7,262 7,365
Property, plant and equipment, net 25,754 24,341
Other 865 3,344
---------------- ------------------
$ 138,125 $ 117,739
================ ==================
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current portion of long-term debt $ 166 $ 166
Accounts payable 15,652 8,771
Accrued expenses 16,344 10,272
---------------- ------------------
Total current liabilities 32,162 19,209
Deferred income taxes 2,341 2,341
Long-term debt 1,660 1,700
Commitments and contingencies
Stockholders' equity:
Preferred stock - $.01 par value; 5,000 shares
authorized, 4,000 issued and outstanding - -
Common stock - $.01 par value; 10,000,000 shares
authorized, 10,356,972 and 10,322,837 issued and
outstanding, respectively 104 103
Additional paid-in capital 44,796 44,645
Accumulated earnings 57,062 49,741
---------------- ------------------
Total stockholders' equity 101,962 94,489
---------------- ------------------
$ 138,125 $ 117,739
================ ==================
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
1999 1998
<S> <C> <C>
Net sales $ 102,982 $ 80,286
Cost of goods sold 86,228 67,897
---------------- ------------------
Gross profit 16,754 12,389
Selling expenses 2,712 2,788
General and administrative expenses 1,908 1,426
Amortization of intangibles 103 103
---------------- ------------------
Operating income 12,031 8,072
Other expense (income):
Interest expense 22 64
Interest income (165) (70)
Other (income) expense (4) 8
---------------- ------------------
Income before income taxes 12,178 8,070
Provision for income taxes 4,857 3,093
---------------- ------------------
Net income $ 7,321 $ 4,977
Earnings per common share:
Basic $ 0.71 $ 0.52
Diluted $ 0.64 $ 0.44
Weighted average number of shares:
Basic 10,347 9,642
Diluted 11,522 11,316
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
1999 1998
Cash flows from operating activities:
<S> <C> <C>
Net income $ 7,321 $ 4,977
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation expense 518 415
Amortization of intangibles 103 103
Increase in trade receivables (4,250) (7,609)
Decrease in inventories 1,768 1,815
Decrease (increase) in prepaid expenses 115 (19)
Increase in accounts payable 6,881 3,712
Increase in accrued expenses 6,073 3,481
Increase in deferred income taxes (200) (580)
---------------- ------------------
Net cash provided by operating activities 18,329 6,295
Cash flows from investing activities:
Decrease (increase) in other assets 2,479 (32)
Purchases of property, plant and equipment (1,931) (1,725)
---------------- ------------------
Net cash provided (used) by investing activities 548 (1,757)
Cash flows from financing activities:
Principal payments on long-term debt (40) (566)
Proceeds from issuance of common stock 151 1,302
---------------- ------------------
Net cash provided by financing activities 111 736
---------------- ------------------
Net increase in cash 18,988 5,274
Cash beginning of period 10,446 3,542
---------------- ------------------
Cash end of period $ 29,434 $ 8,816
================ ==================
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands except shares)
(Unaudited)
<TABLE>
<CAPTION>
Preferred Common Stock Paid-in Accumulated
Stock Shares Amount Capital Earnings Total
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 $ - 10,322,837 $ 103 $44,645 $ 49,741 $ 94,489
Common Stock issued upon
exercise of warrants 295 4 4
Common Stock issued upon
exercise of options 33,840 1 147 148
Net income 7,321 7,321
--------------------------------------------------------------------------
Balance, March 31, 1999 $ - 10,356,972 $ 104 $44,796 $ 57,062 $ 101,962
==========================================================================
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
PART I, ITEM 1
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - GENERAL
In the opinion of National R.V. Holdings, Inc. (collectively, with its
subsidiaries National R.V., Inc., and Country Coach, Inc. referred to herein as
the "Company"), the accompanying unaudited consolidated financial statements
contain all adjustments, consisting only of normal recurring adjustments,
necessary for the fair presentation of the financial position, results of
operations and cash flows for all periods presented. Results for the interim
periods are not necessarily indicative of the results for an entire year and the
financial statements do not include all of the information and footnotes
required by generally accepted accounting principles. These financial statements
should be read in conjunction with the financial statements and notes thereto
contained in the Company's latest annual report on Form 10-K.
NOTE 2 - INVENTORIES
Inventories consist of the following:
March 31, December 31,
1999 1998
------------------ -------------------
Finished goods $ 10,659,000 $ 11,112,000
Work-in-process 14,044,000 13,815,000
Raw materials 11,715,000 12,477,000
Chassis 8,646,000 9,428,000
================== ===================
$ 45,064,000 $ 46,832,000
================== ===================
7
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At March 31, 1999, the Company had working capital of $72.1 million compared
to $63.5 million at December 31, 1998.
Net cash provided by operating activities was $18.3 million for the three
months ended March 31, 1999, compared to $6.3 million for the same period in
1998. The change was due primarily to an increase in net income and favorable
changes in inventories, accounts payable and accrued expenses, offset somewhat
by changes in accounts receivable and deferred income taxes.
Cash provided by investing activities was $0.5 million compared to cash
used by investing activities of $1.8 million for the comparable period last
year. The change was primarily due to a partial $2.55 million distribution in
respect to the Companys limited partnership interest in Dune Jet Services, L.P.
received in March 1999. On April 9, 1999, the Company received a subsequent
distribution of $362,000. The Company expects that its limited partnership
interest in Dune Jet Services will be fully liquidated during 1999.
Cash provided by financing activities was $0.1 million compared to $0.7
million for the comparable period last year.
The Company believes that the combination of internally generated funds,
existing capital and funds available from its existing credit facility, will be
sufficient to meet the Company's planned capital and operational requirements
for at least the next 24 months.
Results of Operations
Net sales for the three months ended March 31, 1999 increased by $22.7
million or 28.3% from the same period last year. The Company's Country Coach
subsidiary shipped 26 more Class A motorhomes than last year and the National RV
subsidiary shipped 122 more Class A motorhomes and 21 more fifth-wheel units.
The average sales price for Class A motorhomes at the Country Coach and National
RV subsidiary increased 7.6% and 8.6%, respectively, to $223,029 and $75,450,
respectively, reflecting strong demand for higher-priced motorhomes with
slide-out rooms.
Cost of goods sold for the three months ended March 31, 1999 increased by
$18.3 million or 27.0% from the comparable period last year. The increase was
primarily due to the increase in sales. Gross profit margin increased to 16.3%
for the current period as compared to 15.4% for the same period last year. The
increase was due primarily to manufacturing efficiencies resulting from
increased volume at both subsidiaries.
Selling expenses for the three months ended March 31, 1999 decreased $0.1
million or 2.7% from the same period last year. The decrease was primarily due
to lower sales commissions at the National RV subsidiary as there was a change
in the method of calculating such commissions. As a percent of net sales,
selling expenses decreased to 2.6% from 3.5% for the same period last year.
General and administrative expenses for the three months ended March 31, 1999
increased $0.5 million or 33.8% from the same period last year. As a percent of
net sales, general and administrative expenses increased to 1.9% from 1.8% for
the same period last year.
8
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
As a result of the foregoing, operating income for the three months ended
March 31, 1999 increased $4.0 million, or 49.0%, to $12.0 million. As a percent
of net sales, operating income increased to 11.7% from 10.1% for the same period
last year.
Net interest expense and other financing related costs for the three months
ended March 31, 1999 increased income by $149,000 from the same period last year
due primarily to an increase in interest income.
As a result of the foregoing, income before taxes increased $4.1 million, or
50.9%, to $12.2 million for the three months ended March 31, 1999. As a percent
of net sales, income before taxes increased to 11.8% from 10.1% for the same
period last year.
Provision for income taxes for the three months ended March 31, 1999 and 1998
was $4.9 million and $3.1 million, respectively. The effective tax rate
increased to 39.9% from 38.3% for the same period last year.
As a result, net income increased $2.3 million, or 47.1%, to $7.3 million for
the three months ended March 31, 1999, as compared to $5.0 million for the same
period last year. As a percent of net sales, net income increased to 7.1% from
6.2% for the same period last year.
9
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Year 2000 Date Conversion
An issue affecting the Company and most other companies is whether computer
systems and applications will recognize and process the year 2000 and beyond.
The Company is in the process of assessing and implementing necessary changes
for all areas of the Company's business which could be impacted; these include
such areas as business computer systems, dealership systems, plant floor
equipment, end-user computing, financial institutions and suppliers.
Based on assessments completed to date and compliance plans in process, the
Company does not expect that the year 2000 issue will have a material effect on
its business operations, consolidated financial condition, cash flows, or
results of operations. However, if appropriate modifications are not made by the
Company's suppliers or dealers on a timely basis, or if the Company's actual
costs or timing for the year 2000 date conversion differ materially from its
present estimates, the Company's operations and financial results could be
significantly adversely affected.
Disclosure Regarding Forward Looking Statements
Statements contained in this Quarterly Report on Form 10-Q that are not
historical facts are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned that
forward-looking statements are inherently uncertain. Actual performance and
results may differ materially from that projected or suggested herein due to
certain risks and uncertainties including, without limitation, the cyclical
nature of the recreational vehicle industry; seasonality and potential
fluctuations in the Company's operating results; the Company's dependence on
chassis suppliers; the integration by the Company of acquired businesses and the
management of growth; potential liabilities under repurchase agreements;
competition; government regulation; product liability; dependence on key
personnel and dependence on certain dealers and concentration of dealers in
certain regions. Additional information concerning certain risks and
uncertainties that could cause actual results to differ materially from that
projected or suggested may be identified from time to time in the Company's
filings with the Securities and Exchange Commission (SEC) and the Company's
public announcements, copies of which are available from the SEC or from the
Company upon request.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
None.
B. Form 8-K
None
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NATIONAL R.V. HOLDINGS, INC.
(Registrant)
Date: April 30, 1999 By /s/ BRADLEY C. ALBRECHTSEN
Bradley C. Albrechtsen
Chief Financial Officer (Principal
Accounting and Finance Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 29,434
<SECURITIES> 0
<RECEIVABLES> 25,157
<ALLOWANCES> 188
<INVENTORY> 45,064
<CURRENT-ASSETS> 104,244
<PP&E> 33,976
<DEPRECIATION> 8,222
<TOTAL-ASSETS> 138,125
<CURRENT-LIABILITIES> 32,162
<BONDS> 1,660
0
0
<COMMON> 104
<OTHER-SE> 101,858
<TOTAL-LIABILITY-AND-EQUITY> 138,125
<SALES> 102,982
<TOTAL-REVENUES> 102,982
<CGS> 86,228
<TOTAL-COSTS> 26,228
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22
<INCOME-PRETAX> 12,178
<INCOME-TAX> 4,857
<INCOME-CONTINUING> 7,321
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,321
<EPS-PRIMARY> 0.71
<EPS-DILUTED> 0.64
</TABLE>
