Cavalier Announces First Quarter Results.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 25, 2001 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 31, 2001. As has been the case for the almost two-year duration of the current 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. , the Company experienced a decline in sales and a net loss for the period due to a number of adverse trends in 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 . However, the first quarter of 2001 was notable in that the rate of revenue decline from year-earlier quarters began to slow and because the Company's pre-tax loss began to narrow versus comparable year-earlier losses. Cavalier's revenue for the first quarter declined 37% to $56,079,000 from $89,693,000 in the year-earlier period. Home manufacturing sales, the largest component of revenue, fell 37% to $52,517,000 for the quarter versus $83,838,000 as floor shipments declined 33% to 3,569 floors compared with 5,290 floors in the same period last year. Other sources of revenue, including retail sales and 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, also declined from the year-earlier period due primarily to a reduction in the number of Company-owned retail sales centers since the prior-year period and weaker sales volume. The Company's pre-tax loss for the first quarter was $10,858,000, reflecting a 21% improvement over the pre-tax loss of $13,775,000 posted in the year-earlier period. The prior-year pre-tax loss included 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. and other related charges for the closure of three retail locations and the idling of two home manufacturing plants totaling $348,000; there were no impairment charges recorded in the first quarter of 2001. The Company recorded an income tax benefit of $600,000 in the first quarter of 2001 relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future income tax refunds Tax refund Money back from the government when too much tax has been paid or withheld from a salary. and certain carrryforward items, but did not record any additional benefit for net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. because management believes it is no longer appropriate to record income tax benefits on current losses in excess of anticipated refunds. In the first quarter of 2000, the Company recorded an income tax benefit of $5,138,000. The net loss for the first quarter of 2001 was $10,258,000 or $0.59 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 $8,637,000 or $0.49 per diluted share. Commenting on the results, David Roberson, President and Chief Executive Officer, said, "Although we clearly remain in a difficult industry and business environment, one that in our view is still characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by excess retail inventory, the ongoing threat of dealer failures, adverse trends in repossessions, and lack of adequate credit sources for both retailers and consumers, we believe overall conditions in our markets began to show signs of stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. during the first quarter. In March, we saw our sales begin to strengthen, which would normally be expected during this seasonal period, and the decline in sales for the quarter was less severe than we have seen in a while, reversing a trend of an accelerating rate of decline that extended throughout most of 2000. Moreover, our revenue fell just 6% compared with the fourth quarter of 2000; during this same time frame last year, revenue declined 26% in the first quarter versus the fourth quarter of 1999. "As we have noted before, we believe this industry slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. affected Cavalier more quickly and to a greater extent than some others in the industry because of our market orientation in the Southeast region," he continued. "Throughout 2000, we continued to make tough decisions in order to bring our capacity in line with current market conditions and sustainable demand for manufactured housing, and we made significant adjustments to our cost structure to enhance our ability to weather this downturn. Although losses continue, we are encouraged by the Company's ongoing progress toward these goals and note that, for the first time since the industry contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction began in mid- mid- pref. Middle: midbrain. 1999, the rate of decline in our sales now appears to be below the level experienced by the industry as a whole. We believe that our keen focus on operations early in this downturn positioned us to now pursue new product initiatives that we believe are being well received by dealers and customers, and which we believe are beginning to have an encouraging influence on our overall sales results." Roberson noted that industry wholesale shipments, based on floors to adjust for shifts in product mix, declined 39% in the first two months of 2001 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 Institute. In the Company's core 11-state marketing region, which includes key manufactured housing states such as Texas, 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). , North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. , Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. , and Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by , the decline in industry sales continued to be disproportionately dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis  pro·por larger, with floor shipments dropping 47% for the
first two months of 2001.Commenting on the Company's ongoing emphasis on asset management, Barry Donnell, Chairman of Cavalier, noted that the Company's inventories remained lean in the first quarter. Inventories at March 31, 2001, totaled $22,708,000 or 54% below the $49,369,000 on the balance sheet at the end of the first quarter 2000. Inventories increased 6% from the fourth quarter of 2000, reflecting the Company's new product initiatives and the seasonal momentum in sales that typically occurs in the spring. Dealer inventory at March 31, 2001, including inventory at company-owned retail sales centers, declined 6% to approximately $179,000,000 from $191,000,000 at year-end 2000 and was 43% below the record level of $314,000,000 at the end of the second quarter of 1999. "We are pleased with the Company's continued progress in managing its inventories - a key aspect of our efforts to maintain a sound financial position during these challenging times," he said. 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 lending capacity of $23,909,000 as of March 31, 2001, 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 current year treasury stock purchases, of which $15,000,000 is outstanding. Cavalier's 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 March 31, 2001, totaled $25,020,000, including the $15,000,000 advanced against the lending capacity of the credit facility, compared with total long-term debt of $24,054,000 at December 31, 2000 and $10,021,000 at March 31, 2000. Cash and cash equivalents stood at $13,277,000 as of March 31, 2001, versus $35,394,000 at year-end 2000 and $24,862,000 at March 31, 2000. Donnell noted that, subsequent to quarter's end, the Company received a federal income tax refund totaling $16,725,000. During the first quarter of 2001, Cavalier repurchased 312,200 common shares under its Board-authorized four million-share stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program at a cost of $607,000. Cavalier has continuing authorization The right or permission to use a system resource; the process of granting access. See access control. to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. approximately 831,200 shares under this program. Cavalier's book value per share of common stock was $4.78 as of March 31, 2001. Concluding, Roberson added: "While we are encouraged by the signs we have seen during the first quarter that indicate increasing stability in our markets, and by the momentum we saw building in our sales as the quarter came to an end, we know that substantial volume improvements must occur going forward to support our present level of operations. Although we have no hard and fast target levels or deadlines for this to happen, we recognize the importance of making real and consistent progress toward reaching 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 operations and generating positive cash flow, both of which will depend somewhat on the volume and margin improvements we hope to achieve as well as other factors. We think this progress is occurring now and we hope that additional plant idlings and other cost-containment measures will not be necessary, but if it becomes apparent that we cannot reach this level of breakeven operations within a reasonable time, we are prepared to reduce our capacity and cost structure further from current levels." 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 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 26, 2001) and may be accessed via the Company's web site, www.cavhomesinc.com. A replay of this call will be available shortly after the call using this same link and will continue until May 18, 2001. With the exception of historical information, the statements made in this press release, including those containing the words "intends," "anticipates," "expects," "plans," "hopes," "believes," and words of similar import, and those relating to 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 on the Company'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. These assumptions, risks and uncertainties include, but are 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 31, 2000, under the heading "Item 1. Business-Risk Factors," as filed with the Securities and Exchange Commission, and in the other documents filed by Cavalier 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 31,
-----------------------
2001 2000
-------- ---------
Revenue $ 56,079 $ 89,693
Loss before income tax benefit $(10,858) $(13,775)(a)
Income tax benefit $ (600) $ (5,138)
Net loss $(10,258) $ (8,637)(a)
Net loss per share - diluted $ (0.59) $ (0.49)(a)
Weighted average shares - diluted 17,535 17,771
(a) The Company recorded impairment and other related charges of $348
($313 net of taxes or $0.02 per diluted share) in the first
quarter of 2000 related to the idling of two home manufacturing
plants and the closing of three retail sales centers.
Cavalier Homes, Inc. Data Sheet
Unaudited
($ in thousands, except per share amounts)
For the 13 Weeks Ended
------------------------
3/31/2001 3/31/2000
--------- ---------
STATEMENT OF INCOME SUMMARY
Home manufacturing net sales $ 52,517 $ 83,838
Financial services 695 1,447
Retail 1,642 2,941
Other 1,225 1,467
------------ ------------
Total revenue $ 56,079 $ 89,693
============ ============
Cost of sales 51,119 78,458
------------ ------------
Gross profit $ 4,960 $ 11,235
============ ============
Selling, general and administrative 15,615 24,295
Impairment and other related charges -- 348
------------ ------------
Operating loss (10,655) (13,408)
------------ ------------
Other income (expense):
Interest expense (521) (608)
Other, net 318 241
------------ ------------
(203) (367)
------------ ------------
Loss before income tax benefit (10,858) (13,775)
Income tax benefit (600) (5,138)
------------ ------------
Net loss $ (10,258) $ (8,637)
============ ============
Net loss per basic and diluted share $ (0.59) $ (0.49)
============ ============
Weighted average shares outstanding 17,535,230 17,770,809
============ ============
Weighted average shares outstanding
assuming dilution 17,535,230 17,770,809
============ ============
OPERATING DATA SUMMARY
Manufacturing sales:
Floor shipments 3,569 5,290
Home shipments:
Single section 508 1,555
Multi-section 1,531 1,861
------------ ------------
Total shipments 2,039 3,416
Shipments to company-owned retail
locations (22) (62)
------------ ------------
Wholesale shipments to independent
retailers 2,017 3,354
============ ============
Retail sales:
Single section 12 57
Multi-section 31 40
------------ ------------
Total sales 43 97
============ ============
Cavalier produced homes sold 40 74
============ ============
Used homes sold 3 21
============ ============
Independent exclusive dealer locations 196 259
Company-owned stores 5 13
Home manufacturing facilities
-- operating 15 17
Installment loan purchases $ 8,914 $ 13,489
EBITDA $ (8,226) $ (10,537)
BALANCE SHEET SUMMARY
Cash, cash equivalents and certificates
of deposit $ 13,277 $ 24,862
Working capital $ 15,523 $ 26,024
Current ratio 1.2 to1 1.3 to1
Long-term debt $ 25,020 $ 10,021
Stockholders' equity $ 83,622 $ 120,034
Number of shares outstanding 17,487,843 17,767,528
Stockholders' equity per share $ 4.78 $ 6.76
CIS installment loan portfolio $ 10,753 $ 8,956
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