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, 2001
--------------
{ } 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 No. 33-0371079
(State or other jurisdiction of (I.R.S.Employer Identification No.)
incorporation or organization)
3411 N. Perris Blvd., Perris, California 92571
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (909) 943-6007
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $.01 per share New York Stock Exchange
-------------------------------------- -----------------------------------
(Title of class) (Name of each Exchange on
which registered)
Securities registered pursuant to Section 12(g) of the Act: NONE
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 May 8, 2001
----- --------------------------
Common stock, par value 9,662,636
$.01 per share
NATIONAL R.V. HOLDINGS, INC.
INDEX
PAGE
PART 1 - FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheet -
March 31, 2001 and December 31, 2000 3
Consolidated Statement of Income -
Three Months Ended March 31, 2001 and 2000 4
Consolidated Statement of Cash Flows -
Three Months Ended March 31, 2001 and 2000 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
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(In thousands except shares)
March 31, December 31,
2001 2000
---- ----
(Unaudited)
ASSETS
Current Assets:
Cash $ 5,724 $ 16,696
Trade receivables, less allowance for
doubtful accounts of $321 16,945 15,109
Inventories 72,534 63,639
Deferred income taxes 6,035 6,035
Prepaid expenses 1,668 2,100
-------- --------
Total current assets 102,906 103,579
Goodwill 6,436 6,539
Property, plant and equipment, net 46,520 44,460
Other 1,096 1,096
-------- --------
$156,958 $155,674
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Current liabilities:
Current portion of long-term debt $ 20 $ 20
Accounts payable 12,765 12,550
Accrued expenses 17,915 14,946
-------- --------
Total current liabilities 30,700 27,516
Deferred income taxes 2,801 2,801
Long-term debt 59 64
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, 10,595,536 issued 106 106
Additional paid-in capital 47,800 47,800
Retained earnings 90,753 92,648
Less cost of treasury stock - 932,900 shares (15,261) (15,261)
-------- --------
Total stockholders' equity 123,398 125,293
-------- --------
$156,958 $155,674
======== ========
See Notes to Consolidated Financial Statements
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands except per share data)
(Unaudited)
Three Months
Ended March 31,
2001 2000
---- ----
Net sales $ 62,380 $106,840
Cost of goods sold 60,187 90,573
-------- --------
Gross profit 2,193 16,267
Selling expenses 3,039 3,374
General and administrative expenses 2,364 2,436
Amortization of intangibles 103 103
-------- --------
Operating (loss) income (3,313) 10,354
Other expense (income):
Interest expense 1 1
Interest income (221) (254)
Other - 8
-------- --------
(Loss) income before income taxes and
cumulative effect of change in
accounting principle (3,093) 10,599
Provision for income taxes (1,198) 3,917
-------- --------
(Loss) income before cumulative effect
of accounting change (1,895) 6,682
Cumulative effect on prior years of change in
accounting principle, net of tax - (1,213)
-------- --------
Net (loss) income $ (1,895) $ 5,469
======== ========
Earnings per common share and common equivalent shares:
Basic:
(Loss) income before cumulative effect
of accounting change $ (0.20) $ 0.67
Cumulative effect of accounting change - (0.12)
-------- --------
Net (loss) income $ (0.20) $ 0.55
======== ========
Weighted average number of shares 9,663 10,034
======== ========
Diluted:
(Loss) income before cumulative effect
of accounting change $ (0.20) $ 0.63
Cumulative effect of accounting change - (0.11)
-------- --------
Net (loss) income $ (0.20) $ 0.52
======== ========
Weighted average number of shares 9,663 10,544
======== ========
See Notes to Consolidated Financial Statements
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months
Ended March 31,
2001 2000
---- ----
Cash flows from operating activities:
Net (loss) income $ (1,895) $ 5,469
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation expense 926 671
Amortization of intangibles 103 103
Gain on asset disposal - (4)
Increase in trade receivables (1,836) (12,761)
(Increase) decrease in inventories (8,895) 6,136
Decrease in prepaid expenses 432 288
Increase in accounts payable 215 204
Increase in accrued expenses 2,969 5,892
Decrease in deferred income taxes - (746)
-------- --------
Net cash (used in) provided by
operating activities (7,981) 5,252
Cash flows from investing activities:
Increase in other assets - (69)
Purchases of property, plant and equipment (2,986) (3,554)
-------- --------
Net cash used in investing activities (2,986) (3,623)
Cash flows from financing activities:
Principal payments on long-term debt (5) (5)
Proceeds from issuance of common stock - 11
Purchase of treasury stock - (15,259)
-------- --------
Net cash used in financing activities (5) (15,253)
-------- --------
Net decrease in cash (10,972) (13,624)
Cash beginning of period 16,696 20,301
-------- --------
Cash end of period $ 5,724 $ 6,677
======== ========
See Notes to Consolidated Financial Statements
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands except shares)
(Unaudited)
Preferred Common Stock Paid-in Retained Treasury Stock
------------ --------------
Stock Shares Amount Capital Earnings Shares Amount Total
--------------------------------------------------------------------------------------------------
Balance, December 31, 2000 $ - 10,595,536 $106 $47,800 $92,648 (932,900) $ (15,261) $ 125,296
Net loss (1,895) (1,895)
--------------------------------------------------------------------------------------------------
Balance, March 31, 2001 $ - 10,595,536 $106 $47,800 $90,753 (932,900) $ (15,263) $ 123,398
==================================================================================================
See Notes to Consolidated Financial Statements
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 (in thousands):
March 31, Dec. 31,
2001 2000
---- ----
(Unaudited)
Finished goods $ 23,489 $ 15,989
Work-in-process 26,102 19,233
Raw materials 15,282 12,927
Chassis 7,661 15,490
-------- --------
$ 72,534 $ 63,639
======== ========
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
requires that all derivative instruments be recorded on the balance sheet at
their fair value. Changes in the fair value of derivatives will be recorded each
period in current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction. The adoption of SFAS 133 in the first quarter of 2001 did
not have any impact on the Company's consolidated financial statements, as the
Company holds no derivatives.
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; potential liabilities under repurchase agreements;
competition; government regulation; warranty claims; product liability;
dependence on certain dealers and concentration of dealers in certain regions;
and the California energy crisis. 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, 2001, the Company had working capital of $72.2 million
compared to $76.0 million at December 31, 2000.
Net cash used in operating activities was $8.0 million for the three months
ended March 31, 2001 compared to net cash provided by operations of $5.3 million
for the same period in 2000. The change was due primarily to the net loss of
$1.9 million in the current quarter compared to income of $5.5 million last
year, and an $8.9 million increase in inventories at March 31, 2001, compared to
a $6.1 million decrease in inventories last year.
Cash used in investing activities was $3.0 million for the three months
ended March 31, 2001 compared to $3.6 million for the comparable period last
year. The change was due primarily to a decrease in expenditures on property,
plant and equipment in the first quarter of 2001. Additions in the first three
months of 2001 primarily consisted of the purchase of the new service facility
in Lakeland, Florida for $2.1 million.
Cash used in financing activities was $5,000 for the three months ended
March 31, 2001 compared to $15.3 million for the three months ended March 31,
2000. 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.
Results of Operations
Net sales for the three months ended March 31, 2001 decreased by $44.5
million or 41.6% from the same period last year, reflecting a slowdown in the
recreational vehicle industry. Wholesale shipments of the Company's gas motor
home products were down 56% from 489 units for the first quarter last year to
213 units this year. Shipments of the Company's motor homes built on diesel
chassis declined 40% to 229 units for the first quarter compared to 383 last
year. Unit sales of the Company's towable products increased 86% to 268 units
from 144 units for the first quarter last year.
Cost of goods sold for the three months ended March 31, 2001 decreased by
$30.4 million or 33.5% from the comparable period last year. The decrease was
due to the drop in sales offset by increases in costs due to inefficiencies
attributable to operating at reduced production levels, continued sales
discounting, and a $1.6 million charge to warranty expense resulting from a
voluntary offer by the Company to correct a weight issue identified on certain
of the Company's "highline" motor coaches. As a result of these current
operating issues, the gross profit margin decreased to 3.5% for the current
period as compared to 15.2% for the same period last year.
Selling expenses for the three months ended March 31, 2001 decreased $0.3
million or 9.9% from the same period last year. The decrease was primarily due
to a decrease in sales incentives and promotions. As a percentage of net sales,
selling expenses increased to 4.8%, from 3.2% for the same period last year.
General and administrative expenses for the three months ended March 31,
2001 increased $0.1 million or 3.0% from the same period last year. As a
percentage of net sales, general and administrative expenses increased to 3.8%
from 2.3% for the same period last year.
Other income for the three months ended March 31, 2001 decreased $33,000
from the same period last year due to a decrease in interest income resulting
from a lower average invested cash balance during the quarter.
Provision for income taxes for the three months ended March 31, 2001
resulted in a credit of $1.2 million compared to a provision of $3.9 million in
2000. 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, the Company had a net loss of $1.9 million for the three
months ended March 31, 2001, as compared to net income of $5.5 million, for the
same period last year.
NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk
Information about market risks for the three months ended March 31, 2001
does not differ materially from that discussed under Item 7A of the registrant's
Annual Report on Form 10-K for 2000.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
None.
B. Form 8-K
None
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 11, 2001 By /s/ BRADLEY C. ALBRECHTSEN
-----------------------------
Bradley C. Albrechtsen
Chief Financial Officer
(Principal Accounting and
Finance Officer)