American Homestar Corporation Announces Results for Third Quarter of Fiscal 2000 and Fourth Quarter Retail Distribution Restructuring Plan.Business Editors HOUSTON--(BUSINESS WIRE)--April 28, 2000 American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Homestar Corporation (Nasdaq/NM:HSTR HSTR Harry S Truman National Historic Site (US National Park Service) HSTR High Speed Token Ring ) today announced results for the third quarter and nine months ended March 31, 2000. For the quarter, revenues were $130 million compared with $151 million in the year-earlier period. The net loss before special charges for the third quarter was $5.2 million, or $0.28 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with net income of $1.8 million, or $0.10 per diluted share, in the prior-year period. Results for the third quarter reflect several special charges totaling $2.9 million, after tax, or $0.16 per diluted share and most of which did not represent a cash expenditure in the third quarter. These special charges include a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. related to the previously announced idling of the Company's manufacturing facility in Brilliant, Alabama Brilliant is a town in Marion County, Alabama, United States. At the 2000 census the population was 762. History The present Town of Brilliant was incorporated as Boston, Alabama and was named for the Bostick family. , asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges (including the Company's portion of an asset impairment charge at Homemax), and a provision for future losses in connection with new home repurchases from retail dealers. As a result of these special charges, the Company posted a net loss of $8.1 million or $0.44 per diluted share for the third quarter fiscal 2000. For the first nine months of fiscal 2000, revenues were $435 million compared with $468 million in the comparable period last year. The net loss before special charges for the first nine months of fiscal 2000 was $12.4 million, or $0.67 per diluted share, compared with net income of $13.4 million, or $0.71 per diluted share, for the first nine months of last year. Results for the nine months ended March 31 reflect the special charges mentioned above as well as after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charges of $1.7 million, or $0.09 per diluted share, in connection with the first quarter closing of the Company's manufacturing facility in Vicksburg, Mississippi Vicksburg is a city in Warren County, Mississippi. It is located 234 miles (377 km) north by west of New Orleans on the Mississippi and Yazoo rivers, and 40 miles (65 km) due west of Jackson, the state capital. . Total after-tax special charges for the nine months ended March 31, 2000, were $4.6 million, or $0.25 per diluted share. Including special charges, the Company reported a net loss of $17 million, or $0.92 per diluted share, for the nine months ended March 31, 2000. The Company also announced its formal plan to return its retail operations to profitability through the conversion of selected, under-performing non-core market Company retail stores to franchise or exclusive independent dealer locations in the coming months. In addition floorplan debt will be reduced by as much as $25 million with fixed operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. including interest reduced by $16 million annually. In connection with this plan, the Company will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. after- tax restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and asset impairment charges of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $18 million, or $0.98 per diluted share, in its fourth quarter ended June June: see month. 30, 2000. More than 90% of these estimated charges are non-cash. The restructuring charges include the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of $14 million in goodwill associated with prior retail acquisitions plus a provision for impaired See assistive technology. leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. at the affected stores. Other related special charges include impairment of inventory at these same stores. The Company has scheduled a conference call with its analysts and institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. at 11:00 am Eastern Standard Time on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , April 28, 2000. The number for the call is 913/981-5530 with a replay available through May 5, 2000 by dialing 719/457-0820 and entering 364340 when prompted for the access code. Commenting on third quarter results and the Company's future plans and outlook, President and Chief Executive Officer Laurence Laurence is the surname or the given name of several people: Surname
Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. expectations. Of real importance is the fact that we made substantial progress, on several fronts, in our plan to restore the Company to profitability and positive cash flow in the coming quarters. "In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite continuing company-wide and industry-wide inventory reductions, our manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. , excluding the effects of special charges, were profitable. The positive effects of our Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). consolidation (from three plants to two), will begin to reflect in our operating results now and will drive manufacturing performance to even higher levels in the current quarter and beyond. "We continued to reduce retail inventories and related debt and carrying costs Carrying costs Costs that increase with increases in the level of investment in current assets. , further adjusting our balance sheet to current industry conditions. "On the retail front, we continued to adjust our business model to lower breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations volumes and we developed a strategy to convert selected, under-performing, non-core Company stores to independent franchise or exclusive dealer locations. We were successful in the conversion of six stores during the quarter with additional conversions in process. As announced today, we have formalized for·mal·ize tr.v. for·mal·ized, for·mal·iz·ing, for·mal·iz·es 1. To give a definite form or shape to. 2. a. To make formal. b. this strategy into a definitive plan which, through broader application, when completed, will concentrate the Company store network in its core regional markets and will further balance the Company's retail distribution base between Company stores and exclusive franchise and independent dealers. Through the third quarter charges already reflected in our results, and the estimated fourth quarter special charges announced today, we believe we have fully provided for any future negative earnings implications attendant ATTENDANT. One who owes a duty or service to another, or in some sort depends upon him. Termes de la Ley, h.t. As to attendant terms, see Powell on Morts. Index, tit. Attendant term; Park on Dower, c. 1 7. to this plan. "We have made several positive and definitive adjustments to our business on all fronts and believe that we are postured for steadily improving results. Although optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the future, we will continue to monitor industry developments and conditions over the coming quarters to insure Insure can mean:
2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . We believe that the actions we have taken over the past three quarters and the execution of our current plan will result in positive operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and positive cash flow in the current quarter and beyond." American Homestar is one of the leading vertically integrated manufactured housing Manufactured housing (also known as prefab housing) is a type of housing unit that is largely assembled in factories and then transported to sites of use. In the United States, the term "manufactured home" specifically refers to a house built entirely in a protected companies. The Company currently operates 12 manufacturing plants, 116 Company-owned retail sales centers, 11 joint venture retail sales centers and serves 73 retail franchisees and over 300 independent retail locations in 28 states. The Company also provides retail financing through its finance affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. , 21st Century Mortgage, and provides insurance and transportation services to its customers.
AMERICAN HOMESTAR CORPORATION
Comparative Operating Summary
Three Months Ended (1)
March 31, February 28,
Second Quarter - Fiscal 2000 2000 1999
------------- -------------
Average New Home Retail Selling
Price - HUD Code $ 55,330 $ 53,622
Average New Home Selling Price
- Modular 122,796 --
New Homes Sold at Retail 1,389 1,396
Manufacturing Shipments (2) 2,386 2,703
Retail Internalization Rate (3) 87% 87%
Sales $ 120,790,000 $ 140,303,000
Total Revenues 130,355,000 151,400,000
Operating Income (Loss) Before
Special Charges (3,859,000) 6,239,000
Operating Income (Loss) (7,776,000)(4) 6,239,000
Net Income (Loss) $ (8,149,000)(5) $ 1,816,000
Diluted Earnings (Loss) Per
Common Share $ (0.44) $ 0.10
Weighted Average Number of
Common Shares Outstanding 18,423,707 18,761,429
Nine Months Ended (1)
March 31, February 28,
First Nine Months - Fiscal 2000 2000 1999
-------------- --------------
Average New Home Retail Selling
Price - HUD Code $ 55,141 $ 53,081
Average New Home Selling Price
- Modular 115,621 --
New Homes Sold at Retail 4,303 4,706
Manufacturing Shipments (2) 7,943 8,874
Retail Internalization Rate (3) 88% 85%
Sales $ 404,149,000 $ 437,559,000
Total Revenues 434,923,000 467,953,000
Operating Income (Loss) Before
Special Charges (5,058,000) 30,072,000
Operating Income (Loss) (11,973,000) (6) 30,072,000
Net Income (Loss) $ (17,025,000) (7) $ 13,357,000
Diluted Earnings (Loss) Per
Common Share $ (0.92) $ 0.71
Weighted Average Number of Common
Shares Outstanding 18,422,966 18,703,404
(1) The Company changed its fiscal year in June 1999 from a May 31
year-end last year to a June 30 year-end in the current year.
(2) Including shipments to Company-owned retail locations.
(3) Percentage of new homes sold at retail, which were also
manufactured by the Company.
(4) Includes special charges totaling $3.9 million (pre-tax)
related to new home repurchase losses, inventory write-downs, asset
impairment reserves and the closing of the Brilliant, Alabama,
manufacturing plant.
(5) Includes special charges of $2.9 million (after-tax), or $0.16
per share.
(6) Includes special charges totaling $6.9 million (pre-tax) in
the first and third quarters.
(7) Includes special charges totaling $4.6 million (after-tax), or
$0.25 per share.
This press release may contain certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. and information based on the beliefs of the Company's management as well as assumptions made by, and information currently available to, the Company's management. Words like "anticipate, "believe," "estimate," "should," "expect," and similar expressions used in this press release are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties, and assumptions, including the risk factors described in the Company's most recently filed registration statement and Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . Should one or more of these risks or uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. or should underlying assumptions prove incorrect Incorrect means to not be correct and may also refer to:
AMERICAN HOMESTAR CORPORATION
SUPPLEMENTAL FINANCIAL DATA
FISCAL YEAR 2000
(AFTER SPECIAL CHARGES)
3rd Year to
Income Statement Quarter Date
------- --------
Revenues:
Retail $ 77,743 $ 255,431
Manufacturing 82,987 276,245
Transportation 2,259 7,580
Finance/Insurance 3,696 12,474
Corporate 2,815 8,111
Elimination (39,145) (124,918)
--------- ---------
Total revenues 130,355 434,923
--------- ---------
Costs and expenses:
Cost of sales 99,812 334,577
S, G & A 35,526 106,528
Special charges 2,673 3,348
Restructuring charge 120 2,443
--------- ---------
Total costs and expenses 138,131 446,896
--------- ---------
Operating income (7,776) (11,973)
Interest expense (4,700) (13,070)
Other (68) (277)
--------- ---------
Income before taxes (12,544) (25,320)
Income tax expense (benefit) (5,080) (8,862)
--------- ---------
Net income before items shown below (7,464) (16,458)
Earnings in affiliates (627) (389)
Minority interest (58) (178)
========= =========
Net income $ (8,149) $ (17,025)
========= =========
Preliminary Balance Sheet at March 31, 2000
Cash $ 7,763
Cash in transit from
financial institutions 29,298
---------
Total cash and cash equivalents 37,061
Receivables 36,263
Inventories 100,015
Prepaid expenses and other
current assets 17,393
---------
Total current assets 190,732
Property, plant and equipment 93,191
Goodwill 90,604
Other assets 19,906
=========
Total assets $ 394,433
=========
Notes payable, current installments $ 2,851
Floor plan payable, net 80,743
Accounts payable and accrued expenses 64,415
---------
Total current liabilities 148,009
Notes payable, less current installments 122,219
Deferred taxes (138)
Minority interest 743
Shareholders' equity 123,600
=========
Total liabilities and
shareholders' equity $ 394,433
=========
AMERICAN HOMESTAR CORPORATION
SUPPLEMENTAL OPERATING DATA
FISCAL YEAR 2000
3rd Year to
Quarter Date
Retail Units Sold: ------ ------
New singles 404 1,250
New doubles 985 3,053
------ ------
Total new 1,389 4,303
Used 343 1,105
Consigned 253 632
====== ======
Total 1,985 6,040
====== ======
Manufacturing Units:
Intercompany
Singles 320 951
Doubles 754 2,384
Triples 20 73
====== ======
Total 1,094 3,408
====== ======
Outside
Singles 175 847
Doubles 1,035 3,389
Triples 82 299
====== ======
Total 1,292 4,535
====== ======
Total produced
Singles 495 1,798
Doubles 1,789 5,773
Triples 102 372
====== ======
Total 2,386 7,943
====== ======
Manufacturing Floors:
Total floors 4,397 14,526
====== ======
Number of Plants 12 13.1
====== ======
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