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, 2000
{ } 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 November 3, 1999
- ----- -------------------------------
Common stock, par value 9,657,086
$.01 per share
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
INDEX
PAGE
PART 1 - FINANCIAL INFORMATION ----
Item 1. Consolidated Balance Sheet -
March 31, 2000 and December 31, 1999 3
Consolidated Statement of Income -
Three Months Ended March 31, 2000 and 1999 4
Consolidated Statement of Cash Flows -
Three Months Ended March 31, 2000 and 1999 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 - 9
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Signature 12
<PAGE>
<TABLE>
<CAPTION>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(In thousands except shares)
<S> <C> <C>
March 31, December 31,
2000 1999
--------- -----------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 6,491 $ 20,301
Trade receivables, less allowance for
doubtful accounts of $199 36,447 22,473
Inventories 62,051 68,187
Deferred income taxes 6,489 5,610
Prepaid expenses 1,151 1,439
--------- --------
Total current assets 112,629 118,010
Goodwill 6,849 6,952
Property, plant and equipment, net 36,054 33,167
Other 1,154 1,085
--------- ---------
$ 156,686 $ 159,214
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 20 $ 20
Accounts payable 11,370 11,166
Accrued expenses 20,800 14,908
--------- ---------
Total current liabilities 32,190 26,094
Deferred income taxes 2,603 2,470
Long-term debt 79 84
Commitments and contingencies
Stockholders' equity:
Preferred stock - $.01 par value; 5,000
shares authorized, 4,000 issued and
outstanding - -
Common stock - $.01 par value; 25,000,000
shares authorized, 10,589,986 and
10,588,886 issued, respectively 106 106
Additional paid-in capital 47,779 47,768
Retained earnings 89,188 82,692
Less cost of treasury stock ( 15,259) -
--------- ---------
Total stockholders' equity 121,814 130,566
--------- ---------
$ 156,686 $ 159,214
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands except per share data)
(Unaudited)
Three Months Ended March 31,
-------------------------------
<S> <C> <C>
2000 1999
--------- ---------
Net sales $ 105,255 $ 102,982
Cost of goods sold 89,178 86,228
--------- ---------
Gross profit 16,077 16,754
Selling expenses 3,370 2,712
General and administrative expenses 2,436 1,908
Amortization of intangibles 103 103
--------- ---------
Operating income 10,168 12,031
Other expense (income):
Interest expense 1 22
Interest income ( 254) ( 165)
Other 8 ( 4)
--------- ---------
Income before income taxes 10,413 12,178
Provision for income taxes 3,917 4,857
--------- ---------
Net income $ 6,496 $ 7,321
========= =========
Earnings per common share:
Basic $0.65 $0.71
Diluted $0.62 $0.64
Weighted average number of shares:
Basic 10,034 10,347
Diluted 10,544 11,522
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
<TABLE>
<CAPTION>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
-------------------
<S> <C> <C>
2000 1999
--------- ---------
Cash flows from operating activities:
Net income $ 6,496 $ 7,321
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense 671 518
Amortization of intangibles 103 103
Gain on asset disposal ( 4) -
Increase in trade receivables ( 13,974) ( 4,250)
Decrease in inventories 6,136 1,768
Decrease in prepaid expenses 288 115
Increase in accounts payable 204 6,881
Increase in accrued expenses 5,892 6,073
Decrease in deferred income taxes ( 746) ( 200)
--------- --------
Net cash provided by operating activities 5,066 18,329
Cash flows from investing activities:
(Increase) decrease in other assets ( 69) 2,479
Purchases of property, plant and equipment ( 3,554) ( 1,931)
--------- --------
Net cash (used in) provided by
investing activities ( 3,623) 548
Cash flows from financing activities:
Principal payments on long-term debt ( 5) ( 40)
Proceeds from issuance of common stock 11 151
Purchase of treasury stock ( 15,259) -
--------- --------
Net cash (used in) provided by
financing activities ( 15,253) 111
--------- --------
Net (decrease) increase in cash ( 13,810) 18,988
Cash and cash equivalents - beginning of period 20,301 10,446
--------- --------
Cash and cash equivalents - end of period $ 6,491 $ 29,434
========= ========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
<TABLE>
<CAPTION>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands except shares)
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Preferred Common Stock Paid-in Retained Treasury Stock
Stock Shares Amount Capital Earnings Shares Amount Total
------ ---------- ------ -------- -------- -------- ---------- ---------
Balance, December 31, 1999 $ - 10,588,886 $ 106 $ 47,768 $ 82,692 - $ - $ 130,566
Common Stock issued
under option plan 1,100 - 11 11
Purchase of
Treasury Stock 932,900 ( 15,259) ( 15,259)
Net income 6,496 6,496
------ ---------- ------ -------- -------- --------- ---------- ----------
Balance, March 31, 2000 $ - 10,589,986 $ 106 $ 47,779 $ 89,188 932,900 $( 15,259) $ 121,814
====== ========== ====== ======== ======== ========= ========== ==========
</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,
2000 1999
------------ -------------
(Unaudited)
Finished goods $ 17,461,000 $ 12,315,000
Work-in-process 19,796,000 18,274,000
Raw materials 14,107,000 14,027,000
Chassis 10,687,000 23,571,000
------------ ------------
$ 62,051,000 $ 68,187,000
============ =============
7
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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. Certain risks and uncertainties that could cause actual results
to differ materially from that projected or suggested are set forth below.
Additional information concerning risks and uncertainties 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.
Liquidity and Capital Resources ------------------------------- At March
31, 2000, the Company had working capital of $80.4 million compared to $91.9
million at December 31, 1999.
Net cash provided by operating activities was $5.1 million for the three
months ended March 31, 2000 compared to $18.3 million for the same period in
1999. The change was due primarily to an increase in trade receivables.
Cash used in investing activities was $3.6 million for the three months
ended March 31, 2000 compared to cash provided by investing activities of $0.5
million for the comparable period last year. The change was due primarily to an
increase in expenditures on property, plant and equipment in the first quarter
of 2000 which were offset by a $2.55 million distribution in respect to the
Company's limited partnership interest in Dune Jet Services, L.P. received in
March 1999.
Cash used in financing activities was $15.3 million for the three months
ended March 31, 2000 compared to cash provided by financing activities of $0.1
million for the comparable period last year. The difference was primarily the
result of cash used by the Company in its stock repurchase program for the
repurchase of 932,900 shares in the first quarter of 2000.
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.
8
<PAGE>
Results of Operations
- ---------------------
Net sales for the three months ended March 31, 2000 increased by $2.3
million or 2.2% from the same period last year. The Company shipped 383 coaches
on diesel chassis, 38 higher than last year, with the average price of these
products increasing 4% to $170,000. The increase in diesel motorhome sales was
offset by a decrease in sales of the Company's gas products by 163 units to 489.
The average price of gas motorhomes increased 6% to $68,000. Unit sales of the
Company's fifth-wheel travel trailers increased 26%, to 144 units compared to
114 units in the first quarter of 1999. The average price of these units
increased 7% to $39,000.
Cost of goods sold for the three months ended March 31, 2000 increased by
$2.9 million or 3.4% from the comparable period last year. The increase was due
to both the increase in sales as well as to a $1 million one-time charge to
warranty expense resulting from a voluntary offer by the Company to correct a
weight distribution issue identified on certain of the Company's "highline"
motor coaches. As a result of the $1 million charge, the gross profit margin
decreased to 15.3% for the current period as compared to 16.3% for the same
period last year.
Selling expenses for the three months ended March 31, 2000 increased $0.66
million or 24.3% from the same period last year. The increase was primarily due
to increased sales incentives and certain costs related to setting up new
dealers for the Company's "highline" coaches. As a percentage of net sales,
selling expenses increased to 3.2%, from 2.6% for the same period last year.
General and administrative expenses for the three months ended March 31,
2000 increased $0.53 million or 27.7% from the same period last year. The
increase was primarily due to higher compensation and related costs. As a
percentage of net sales, general and administrative expenses increased to 2.3%
from 1.9% for the same period last year.
Other income for the three months ended March 31, 2000 increased $98,000
from the same period last year due primarily to an increase in interest income.
As a result of the foregoing, income before taxes decreased $1.8 million,
or 14.5%, to $10.4 million for the three months ended March 31, 2000. As a
percentage of net sales, income before taxes decreased to 9.9% from 11.8% for
the same period last year.
Provision for income taxes for the three months ended March 31, 2000 and
1999 was $3.9 million and $4.9 million, respectively. The effective tax rate
decreased to 37.6% from 39.9% for the same period last year. The decrease in the
effective tax rate was due to a benefit arising from usage of a capital loss
carryover.
As a result, net income decreased $0.8 million, or 11.3%, to $6.5 million
for the three months ended March 31, 2000, as compared to $7.3 million for the
same period last year. As a percentage of net sales, net income decreased to
6.2% from 7.1% for the same period last year.
9
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Information about market risks for the three months ended March 31, 2000
does not differ materially from that discussed under Item 7A of the registrant's
Annual Report on form 10-K for 1999.
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: May 10, 2000 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-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 6,491
<SECURITIES> 0
<RECEIVABLES> 36,447
<ALLOWANCES> 199
<INVENTORY> 62,051
<CURRENT-ASSETS> 112,629
<PP&E> 36,054
<DEPRECIATION> 9,751
<TOTAL-ASSETS> 156,686
<CURRENT-LIABILITIES> 32,190
<BONDS> 0
0
0
<COMMON> 106
<OTHER-SE> 121,708
<TOTAL-LIABILITY-AND-EQUITY> 156,686
<SALES> 105,255
<TOTAL-REVENUES> 105,255
<CGS> 89,178
<TOTAL-COSTS> 5,909
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1
<INCOME-PRETAX> 10,413
<INCOME-TAX> 3,917
<INCOME-CONTINUING> 6,496
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,496
<EPS-BASIC> 0.65
<EPS-DILUTED> 0.62
</TABLE>
