| National
R.V. Holdings, Inc. Announces Q4 and YE 2006 Results
PERRIS, Calif., March 20, 2007
/PRNewswire-FirstCall via COMTEX News Network/ -- National
R.V. Holdings, Inc. (NYSE: NVH) (the "Company"), the owner of RV
manufacturer National RV, Inc., today announced preliminary,
unaudited financial results for its fourth quarter and year
ended December 31, 2006.
Net sales declined to $82.0
million in the fourth quarter of 2006, down 23% from $106.5
million in the fourth quarter of 2005. For the year ended
December 31, 2006, net sales decreased 14%, to $397.1 million,
down from $463.6 million in 2005.
The Company reported a net loss
of $8.1 million for the fourth quarter of 2006 and $24.3 million
for the 2006 fiscal year, compared to a net loss of $7.0 million
for the fourth quarter of 2005 and $19.8 million for the 2005
fiscal year. These figures correspond to a net loss of $0.78 per
diluted share for the fourth quarter of 2006 and $2.35 per
diluted share for the year, compared to a net loss of $0.67 per
diluted share for the fourth quarter of 2005 and $1.91 per
diluted share for the 2005 fiscal year.
"After beginning 2006 showing
significant progress in our turnaround efforts, with continued
market share gains and reduced losses, the supplier defective
fiberglass issue resulted in substantial unexpected costs and
created a liquidity strain, which was compounded by a continued
decline in the Class A industry and our own ensuing strategic
process. This created an environment of severe uncertainty that
began to significantly adversely affect the Company, its
employees, suppliers, customers, and dealers," stated Brad
Albrechtsen, the Company's president and chief executive
officer. "The challenges increased in the third and fourth
quarters of 2006, and continued into the first quarter of 2007.
As a result, we expect continued losses through the next couple
of quarters."
"The turning point was the sale
of Country Coach on February 20, 2007, which resulted in the
infusion of $38 million of cash and enabled us to pay off our
line of credit, pay down our suppliers, and end the uncertainty
of the process. We are pleased to be in a position where we can
once again turn our full attention to providing our dealers and
customers with some of the finest motorhomes in the industry,"
continued Albrechtsen. "The Company is in the process of
dramatically resizing itself to be profitable at current demand
levels, including significantly reducing our operating footprint
by consolidating onto a portion of the Perris property, and
analyzing other alternatives. We are looking at and implementing
numerous strategic initiatives to increase sales, lower costs,
and increase margins."
The Company also announced that
it continues to consider the option to execute the
sale/leaseback transaction as a way to generate additional
capital and liquidity and plans to make that decision within the
next few weeks.
Wholesale unit shipments of
diesel motorhomes for the quarter ended December 31, 2006 were
235, down 27% from 324 units shipped during the same period last
year. Shipments of gas motorhomes for the fourth quarter of 2006
were 226, also down 27% compared to the 308 gas units sold
during the same period last year. Total unit shipments for the
fourth quarter of 2005 were 461, a decrease of 27% over the
fourth quarter of 2005.
For the year ended December 31,
2006, the Company's wholesale unit shipments of diesel
motorhomes were 1,187, down 16% from 1,411 units during 2005.
Wholesale unit shipments of gas motorhomes were 1,137 for the
twelve months of 2006, down 18% from 1,381 units shipped during
2005. The Company's combined diesel and gas Class A motorhome
shipments were down 17% in 2006 compared to 2005, while the
average selling price increased 3% to $171,000, compared to
$166,000 in 2005. According to the Recreation Vehicle Industry
Association, industry-wide shipments of Class A motorhomes were
down 14% in 2006 compared to 2005.
The gross profit margin for the
quarter ended December 31, 2006 was 0.2% compared to 2.0% for
the same period last year. For the year ended December 31, 2006,
the gross profit margin was 1.6% compared to 2.6% for the year
ended December 31, 2005. The lower gross margins in 2006 were
due to costs associated with the supplier-caused fiberglass
sidewall problem, significant investments in new product
introductions, and lower production rates leading to lower
fixed-cost absorption.
Operating expenses for the
fourth quarter of 2006 declined 15% to $7.1 million, or 8.6% of
net sales, compared to $8.3 million, or 7.8% of net sales, for
the fourth quarter of 2005. For the year, operating expenses
were $27.6 million, or 6.9% of net sales, which compares to
$30.1 million, or 6.5% of net sales, for the prior year, a
decrease of 8.5%. Reductions in selling, marketing and
expenditures related to compliance with Sarbanes-Oxley in 2006
compared to 2005, were somewhat offset by increases in costs
associated with the strategic process the Company was involved
in during the latter part of the year.
As a result of the sale of the
Country Coach subsidiary, the pro forma net book value of the
Company as of December 31, 2006 increases by $6.9 million from
$36.1 million to $43.0 million. The loss for the year ended
December 31, 2006 excluding Country Coach increased by $0.7
million from $24.3 million to $25.0 million. The complete pro
forma financial statement is expected to be filed within the
next few days on Form 8K/A with the Securities and Exchange
Commission.
About National R.V.
Holdings, Inc.
National R.V. Holdings, Inc.,
through its wholly-owned subsidiary, National RV, Inc., is one
of the nation's leading producers of motorized recreational
vehicles, often referred to as RVs or motorhomes. From its
Perris, California facility, NRV designs, manufactures and
markets Class A gas and diesel motorhomes under model names
Dolphin, Pacifica, Sea Breeze, Surf Side, Tradewinds and Tropi-Cal.
NRV began manufacturing RVs in 1964. Based upon retail
registrations for the year ended December 31, 2006, the Company,
through its NRV subsidiary, is the seventh largest domestic
manufacturer of Class A motorhomes. On February 20, 2007, the
Company, sold its wholly-owned subsidiary Country Coach, Inc.,
which designed, manufactured and marketed high-end (Highline)
Class A diesel motorhomes from its Junction City, Oregon
facility.
This release and other
statements by the Company contain forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995 including statements about the Company's future
expectations, performance, plans, and prospects, as well as
assumptions about future events. 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; continuation of losses;
the ability of the Company to address the effects caused by
fiberglass material supplied by a third party supplier; the
ability of the Company's new and redesigned product
introductions to achieve market acceptance; the ability of the
Company to close the sale leaseback transaction discussed above;
the ability of the Company to obtain long-term debt financing;
seasonality and potential fluctuations in the Company's
operating results; any material weaknesses in the Company's
internal control over financial reporting or the failure to
remediate any of the previously disclosed material weaknesses;
any failure to implement required new or improved controls; the
Company's ability to maintain its stock exchange listing; the
Company's dependence on chassis suppliers; potential liabilities
under dealer/lender repurchase agreements; competition;
government regulation; warranty claims; product liability; 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 in the Company's Form 10-K and other
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.
Contact:
Thomas J. Martini
800.322.6007
cfo@nrvh.com
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
December 31,
2006 2005
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $16 $11
Restricted cash and cash equivalents 387 201
Receivables, less allowance for doubtful
accounts ($299 and $392, respectively) 18,995 21,533
Inventories 74,417 61,940
Deferred income taxes 384 1,281
Prepaid expenses 2,108 2,359
Total current assets 96,307 87,325
Long-term restricted cash and cash equivalents 341 --
Property, plant and equipment, net 37,430 38,457
Other assets 1,355 1,608
Total assets $135,433 $127,390
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Book overdraft $2,227 $2,582
Accounts payable 39,552 20,218
Accrued expenses 23,150 26,273
Line of credit 29,012 12,059
Current portion of capital leases 63 57
Total current liabilities 94,004 61,189
Long-term accrued expenses 4,802 5,089
Deferred income taxes 384 1,281
Long-term portion of capital leases 124 169
Total liabilities 99,314 67,728
Commitments and contingencies -- --
Stockholders' equity:
Preferred Stock, $0.01 par value, 5,000 shares
authorized, 4,000 issued and outstanding -- --
Common Stock, $0.01 par value, 25,000,000
shares authorized, 10,339,484 issued and
outstanding 103 103
Additional paid-in capital 38,353 37,563
Retained earnings (deficit) (2,337) 21,996
Total stockholders' equity 36,119 59,662
$135,433 $127,390
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited)
Net sales $82,011 $106,528 $397,118 $463,610
Cost of goods sold 81,868 104,421 390,899 451,622
Gross profit 143 2,107 6,219 11,988
Selling expenses 3,191 4,012 13,052 15,301
General and
administrative expenses 3,881 4,312 14,499 14,801
Operating loss (6,929) (6,217) (21,332) (18,114)
Interest expense 942 509 2,777 1,492
Other expense (income) 60 53 (41) (19)
Loss before income
taxes (7,931) (6,779) (24,068) (19,587)
Provision for income
taxes 142 181 265 181
Net loss $(8,073) $(6,960) $(24,333) $(19,768)
Loss per common share:
Basic $(0.78) $(0.67) $(2.35) $(1.91)
Diluted $(0.78) $(0.67) $(2.35) $(1.91)
Weighted average number
of shares:
Basic 10,339 10,339 10,339 10,338
Diluted 10,339 10,339 10,339 10,338
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Twelve Months Ended
December 31,
2006 2005
(Unaudited)
Cash flows from operating activities:
Net loss $(24,333) $(19,768)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization 4,238 3,890
Bad debt expense 174 270
Reserve and write down of inventories 7,171 1,767
Loss on asset disposal 97 59
Stock-based compensation 790 --
Changes in assets and liabilities:
Decrease (increase) in receivables 2,364 (1,827)
Decrease (increase) in inventories (19,648) 10,725
Decrease in prepaid expenses 251 645
Increase in accounts payable 19,334 3,157
Increase (decrease) in accrued expenses (3,410) 2,500
Net cash provided by (used in) operating
activities $(12,972) $1,418
Cash flows from investing activities:
Decrease (increase) in other assets $136 $(177)
Decrease (increase) in restricted cash and
cash equivalents (527) 50
Repayments on note receivable -- 2,213
Proceeds from sale of property, plant and
equipment and other assets 211 84
Purchase of property, plant and equipment (3,402) (4,603)
Net cash used in investing activities $(3,582) $(2,433)
Cash flows from financing activities:
Net advances under (payments on) line of
credit $16,953 $(631)
Deferred financing costs -- (236)
Increase (decrease) in book overdraft (355) 1,779
Principal payments on capital leases (39) (37)
Proceeds from issuance of common stock -- 140
Net cash provided by financing activities $16,559 $1,015
Net increase in cash and cash equivalents 5 --
Cash and cash equivalents, beginning of year 11 11
Cash and cash equivalents, end of year $16 $11
Thomas J. Martini of National
R.V. Holdings, Inc., +1-800-322-6007,
cfo@nrvh.com
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