Cavalier Announces First Quarter Results; Sales Growth Continues; Pre-Tax Loss Narrows.Business Editors ADDISON Addison, village (1990 pop. 32,058), Du Page co., NE Ill.; inc. 1884. An industrial suburb of Chicago, it manufactures machinery and plastic items. , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. .--(BUSINESS WIRE)--April 24, 2002 Cavalier cavalier (kăv'əlĭr`), in general, an armed horseman. In the English civil war the supporters of Charles I were called Cavaliers in contradistinction to the Roundheads, the followers of Parliament. Homes, Inc. (NYSE NYSE See: New York Stock Exchange :CAV (1) (Component Analog Video) See YPbPr. (2) (Constant Angular Velocity) Rotating an optical disc or hard disk at a constant speed. Contrast with "constant linear velocity" (CLV), in which the platter rotates at varying speeds. ) today announced results for the first quarter ended March 30, 2002. The Company experienced a rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in floor shipments during the first quarter compared with the same period last year, continuing the trends seen toward the end of 2001 and translating into significant revenue growth versus the year-earlier quarter. As expected, however, the ongoing challenges of a relatively weak and competitive industry environment, together with the seasonality of the first quarter, placed pressure on the Company's gross margin, which while improved from the same period last year, declined from the level witnessed in the fourth quarter of 2001. Cavalier's revenue for the first quarter increased 60% to $94,913,000 from $59,178,000 in the year-earlier period. Home manufacturing sales, the largest component of revenue, rose 66% to $91,968,000 for the quarter versus $55,563,000, as floor shipments increased 58% to 5,651 floors compared with 3,569 floors in the same period last year. Other sources of revenue, including retail sales, financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. revenue and other revenue, declined 19% to $2,945,000 from $3,615,000 in the first quarter of 2001. The Company's pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta loss for the first quarter, before the cumulative effect of a change in accounting principle discussed below, was $2,148,000 and reflected an 80% improvement over the pre-tax loss of $10,858,000 posted in the year-earlier period. During the first quarter of 2002, Cavalier recorded an income tax benefit of $3,274,000, reflecting the benefit of both the current quarter's loss and the new Jobs Creation and Workers' Assistance Act that was passed in March 2002. Under this law, companies are able to carry back net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. five years instead of two years as provided under the previous rules. In the year-earlier quarter, Cavalier recorded an income tax benefit of $600,000. The Company's income for the first quarter of 2002, before the cumulative effect of a change in accounting principle, was $1,126,000 or $0.06 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 a net loss in the prior-year period of $10,258,000 or $0.59 per diluted share. As previously announced, Cavalier implemented Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. " (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142), as of January January: see month. 1, 2002. Pursuant to SFAS No. 142, the Company recorded a charge of $14,162,000 or $0.80 per diluted share, as a cumulative effect of a change in accounting principle, to eliminate the amount of goodwill on the balance sheet at the beginning of the quarter. The Company's net loss for the first quarter of 2002, giving effect to the change in accounting principle, was $13,036,000 or $0.74 per diluted share. Commenting on the results, David Roberson Roberson is a surname, and may refer to
v. height·ened, height·en·ing, height·ens v.tr. 1. To raise or increase the quantity or degree of; intensify. 2. To make high or higher; raise. v.intr. uncertainty regarding sufficient credit availability for both retailers and consumers. Despite these conditions, we are pleased that Cavalier's sales have continued to rebound from year-earlier levels. The 58% increase in floor shipments we experienced during the quarter follows a 67% increase in the fourth quarter of 2001 and a 45% increase in the third quarter last year. This continued progress, in our opinion, highlights the efforts we have made to re-energize our sales and create appealing and value-packed products that have been successful for dealers. Ongoing growth in our exclusive dealer network, which increased to 266 locations at March 30, 2002, from 196 at the end of the first quarter last year, also underscores the breadth of this success. Considering that the first quarter is traditionally the slowest period of the year for our industry, and the related impact that reduced manufacturing volume had on our gross margin for the quarter, our ability to remain on a path toward improved operational performance in the first quarter was encouraging." Roberson noted that the Company's 58% increase in floor shipments, which takes into account product mix changes, continued to contrast favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to industry wholesale shipments. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the most recent sales data available from the 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 Institute, industry wholesale floor shipments increased 10% in the first two months of 2002. Commenting on the Company's financial position, Barry Barry, Welsh Barri, town (1991 pop. 45,053) and port, Vale of Glamorgan, S Wales, on the Bristol Channel. Once a major coal-exporting port, its more diversified export products include cement, flour, and steel products. Donnell, Chairman, pointed out that Cavalier ended the first quarter with cash and cash equivalents totaling $26,239,000 versus $13,277,000 at the same time last year. Inventories remained lean, although slightly higher than at the end of the first quarter of 2001 because of the rebound in sales levels that has occurred since that time. Inventories increased 10% to $25,061,000 at March 30, 2002, from $22,708,000 at the end of the first quarter last year. First quarter dealer inventory, including inventory at company-owned retail sales centers, remained largely unchanged from a year ago at approximately $178,000,000. According to Donnell, Cavalier's $35,000,000 revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, which matures in April 2003, provided the Company with total borrowing capacity of $20,689,000 at quarter's end, based on the Company's current tangible net worth Tangible Net Worth Total assets less intangible assets and total liabilities. Notes: In terms of a consumer, tangible net worth is the sum of all your tangible assets (cash, home, cars, etc). plus treasury stock purchases and reduced by any outstanding letters of credit. Of this available amount, $15,000,000 was outstanding at March 30, 2002. Cavalier's total long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. at the end of the first quarter of 2002, including the $15,000,000 advanced against the borrowing capacity of the Company's credit facility, totaled $23,703,000 versus $25,020,000 at March 31, 2001. Commenting on the Company's write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of goodwill in the first quarter of 2002, Donnell noted that the charge related to the implementation of SFAS No. 142 did not affect Cavalier's compliance with covenants contained in its revolving credit facility. He also noted that the Company has no remaining goodwill on its balance sheet following 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. . To promote a clearer understanding of the Company's financial results for the quarter, Cavalier provided pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma information for the first quarters of 2002 and 2001, as if SFAS No. 142 had been implemented prior to the beginning of 2001, and no goodwill amortization expense had been recorded in 2001 (Cavalier recorded a total of $978,000 in goodwill amortization expense in 2001, with $245,000 of that amount recorded in the first quarter). On this pro forma basis, the Company's net income for the first quarter of 2002 would have been $1,126,000 or $0.06 per diluted share compared with a net loss of $10,013,000 or $0.58 per diluted share in the first quarter of 2001. Concluding, Roberson added: "While Cavalier's performance has continued to improve, as seen by four consecutive quarters of higher floor shipments versus comparable prior-year figures and a significant rebound in revenue from the trough Trough The stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion. of the industry downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. , market conditions presently are soft and backlogs are tight. The relative stability we now see in the industry, after much capacity contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction over the past few years is tenuous tenuous Intensive care adjective Referring to a 'touch-and-go,' uncertain, or otherwise 'iffy' clinical situation and depends on many factors that remain outside our control, especially the general economic conditions that drive consumer purchases and the availability of adequate financing sources to support that demand. Any increase in repossessions or dealer failures clearly would affect the fragile fragile - brittle recovery that seems to be underway. Nevertheless, against the current industry backdrop Backdrop may refer to:
n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that Cavalier's results for the second quarter will continue to show improvement over those for the comparable quarter last year." Cavalier Homes, Inc. and its subsidiaries produce, sell, and finance manufactured housing. The Company markets its homes primarily through independent dealers, including exclusive dealers that carry only Cavalier products, and provides financial services primarily to retail purchasers of manufactured homes sold through its dealer network. A public, listen-only simulcast of Cavalier Homes' first quarter conference call will begin at 9:30 a.m. Eastern Daylight Time tomorrow (April 25, 2002) and may be accessed via the Company's web site, www.cavhomesinc.com; investors are invited to access the simulcast at least 10 minutes before the start time in order to complete a brief registration form. A replay of this call will be available shortly after the call using this same link and will continue until May 25, 2002. With the exception of historical information, the statements made in this press release, including those containing the words "believe," "know," "will," and words of similar import, and those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc industry trends and conditions, Cavalier's expectations for its results of operations in future periods, acceptance of Cavalier's new product initiatives and the effect of these and other steps taken in the last two years on Cavalier's future sales and earnings, and Cavalier's plans and expectations for addressing current and future industry and business conditions, constitute 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. , are based upon current expectations, and are made pursuant to the "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements involve certain known and unknown assumptions, risks and uncertainties that could cause actual results to differ materially from those included in or contemplated by the statements, including among other matters, significant competitive activity, including promotional and price competition; interest rates; increases in raw material and energy costs; changes in customer demand for Cavalier's products; inherent risks in the market place associated with new products and new product lines; currency fluctuations, exchange controls, market disruptions Market Disruption A situation where markets cease to function in a regular manner, typically characterized by rapid and large market declines. Market disruptions can result from both physical threats to the stock exchange or a unusual trading (as in a crash). and other effects resulting from the terrorist attacks on New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. on September September: see month. 11, 2001 and actions, including armed conflict, by the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and other governments in reaction thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. ; and other disruptions and other risk factors listed from time to time in Cavalier's reports filed with the Securities and Exchange Commission, including, but not limited to, those discussed or indicated in Cavalier's Annual Report on 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. for the period ended December December: see month. 31, 2001, under the heading "Item 1. Business-Risk Factors," as filed with the Securities and Exchange Commission. Cavalier disclaims any obligation to update any forward-looking statements as a result of developments occurring after the issuance of this press release.
Cavalier Homes, Inc.
Unaudited Financial Highlights
(In thousands, except per share amounts)
First Quarter Ended
March 30, March 31,
2002 2001
-------- --------
Revenue $ 94,913 $ 59,178
======== ========
Loss before income tax benefit $ (2,148) $(10,858)
Income tax benefit (3,274) (600)
-------- --------
Income (loss) before cumulative effect of
change in accounting principle 1,126 (10,258)
Cumulative effect of change in accounting
principle, net of tax benefit of $1,306 (14,162) --
-------- --------
Net loss $(13,036) $(10,258)
======== ========
Basic and diluted income (loss) per share:
Income (loss) before cumulative effect of
change in accounting principle $ 0.06 $ (0.59)
Cumulative effect of change in accounting
principle, net of tax (0.80) --
-------- --------
Net loss $ (0.74) $ (0.59)
======== ========
Weighted average shares - basic 17,663 17,535
======== ========
Weighted average shares - diluted 17,726 17,535
======== ========
Cavalier Homes, Inc. Data Sheet
Unaudited
($ in thousands, except per share amounts)
For the 13 Weeks Ended
----------------------
3/30/2002 3/31/2001
----------- -----------
STATEMENT OF OPERATIONS SUMMARY
Home manufacturing net sales $ 91,968 $ 55,563
Financial services 432 695
Retail 1,589 1,642
Other 924 1,278
----------- -----------
Total revenue $ 94,913 $ 59,178
=========== ===========
Cost of sales 81,583 54,155
----------- -----------
Gross profit $ 13,330 $ 5,023
=========== ===========
Selling, general and administrative 15,541 15,678
Operating loss (2,211) (10,655)
----------- -----------
Other income (expense):
Interest expense (373) (521)
Other, net 436 318
----------- -----------
63 (203)
----------- -----------
Loss before income tax benefit (2,148) (10,858)
Income tax benefit (3,274) (600)
----------- -----------
Income (loss) before cumulative effect of
change in accounting principle 1,126 (10,258)
Cumulative effect of change in accounting
principle, net of tax benefit of $1,306 (14,162) --
----------- -----------
Net loss $ (13,036) $ (10,258)
=========== ===========
Basic and diluted income (loss) per share:
Income (loss) before cumulative
effect of change in accounting
principle $ 0.06 $ (0.59)
Cumulative effect of change in
accounting principle, net of tax (0.80) --
----------- -----------
Net loss $ (0.74) $ (0.59)
=========== ===========
Weighted average shares
outstanding - basic 17,662,867 17,535,230
=========== ===========
Weighted average shares
outstanding - diluted 17,725,588 17,535,230
=========== ===========
Pro Forma Information:
Net loss as reported $ (13,036) $ (10,258)
Amortization of goodwill -- 245
----------- -----------
Adjusted net loss (13,036) (10,013)
Cumulative effect of change in
accounting principle, net of tax 14,162 --
----------- -----------
Pro forma net income (loss) $ 1,126 $ (10,013)
=========== ===========
Basic and diluted income (loss) per share:
Net loss as reported $ (0.74) $ (0.59)
Amortization of goodwill -- 0.01
----------- -----------
Adjusted net loss (0.74) (0.58)
Cumulative effect of change in
accounting principle, net of tax 0.80 --
----------- ------------
Pro forma net income (loss) $ 0.06 $ (0.58)
=========== ============
Cavalier Homes, Inc. Data Sheet (Continued)
Unaudited
($ in thousands, except per share amounts)
For the 13 Weeks Ended
----------------------
3/30/2002 3/31/2001
OPERATING DATA SUMMARY --------- ---------
Manufacturing sales:
Floor shipments 5,651 3,569
Home shipments:
Single section 661 508
Multi-section 2,495 1,531
----------- -----------
Total shipments 3,156 2,039
Shipments to company-owned retail
locations (47) (22)
----------- -----------
Wholesale shipments to independent
retailers 3,109 2,017
=========== ===========
Retail sales:
Single section 20 12
Multi-section 27 31
----------- -----------
Total sales 47 43
=========== ===========
Cavalier produced homes sold 42 40
=========== ===========
Used homes sold 5 3
=========== ===========
Independent exclusive dealer locations 266 196
Company-owned stores 5 5
Home manufacturing facilities
-- operating 14 15
Installment loan purchases $ 8,598 $ 8,914
EBITDA (excludes cumulative effect of
change in accounting principle) $ (84) $ (8,226)
BALANCE SHEET SUMMARY
Cash, cash equivalents and certificates
of deposit $ 26,239 $ 13,277
Working capital $ 21,436 $ 16,830
Current ratio 1.3 to 1 1.3 to 1
Long-term debt $ 23,703 $ 25,020
Stockholders' equity $ 67,159 $ 83,622
Number of shares outstanding 17,663,644 17,487,843
Stockholders' equity per share $ 3.80 $ 4.78
CIS installment loan portfolio $ 6,624 $ 10,753
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