Cavalier Announces Fourth Quarter and Year-End 2003 Results; Cavalier Homes to Move Stock Listing to the American Stock Exchange.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)--March 3, 2004 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 financial results for the fourth quarter and year ended December December: see month. 31, 2003. Highlights of the Company's report included (dollars in thousands, except per share amounts):
Fourth Quarter Ended Year Ended
December 31, December 31,
-------------------- ------------------
2003 2002 2003 2002
-------- -------- --------- ---------
Revenue $ 56,041 $ 87,008 $ 247,836 $ 387,257
Income (loss) before income
taxes 1,139 (11,649) (5,088) (14,792)
Cumulative effect of change
in accounting principle, net -- -- -- (14,162)
Net income (loss) 1,078 (20,988) (4,570) (34,670)
Net income (loss) per share,
basic and diluted 0.06 (1.19) (0.26) (1.96)
Revenue for the fourth quarter declined 36% to $56,041,000 from $87,008,000 in the year-earlier period, and on a sequential One after the other in some consecutive order such as by name or number. quarterly basis, revenue declined 12% from $63,863,000 in the third quarter of 2003. Home manufacturing sales, the largest component of revenue, fell 37% to $53,178,000 for the quarter versus $84,266,000 for the fourth quarter of 2002 and 12% from $60,176,000 in the third quarter of 2003. Floor shipments for the quarter declined 45% to 2,576 floors versus 4,644 floors in the fourth quarter last year and 19% from 3,193 floors in the third quarter of 2003. Cavalier reported pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income of $1,139,000 for the fourth quarter of 2003, inclusive of inclusive of prep. Taking into consideration or account; including. 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 totaling $574,000. In the year-earlier quarter, the Company's pre-tax loss was $11,649,000, inclusive of impairment and other related charges of $6,064,000. The Company's provision for income taxes was $61,000 in the fourth quarter of 2003 versus $9,339,000 in the fourth quarter of 2002, with the 2002 amount reflecting primarily a valuation allowance for deferred tax assets. Cavalier's net income for the fourth quarter of 2003 was $1,078,000 or $0.06 net income 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 of $20,988,000 or $1.19 net loss per diluted share in the same period last year. "As 2003 began, we anticipated there would be additional pressure on sales due to ongoing economic weakness and, in particular, the shortage of retail and dealer financing," said David Roberson Roberson is a surname, and may refer to
"Despite these challenges, Cavalier closed the year with a profitable quarter," he continued. "The improvement in fourth quarter operating results reflected primarily the effects of cost-cutting measures implemented in late 2002 and early 2003 that extended our efforts to reduce expenses and right-size the Company in light of current market conditions. Because of these steps, our gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. has generally improved over the past several quarters, even as sales have remained under pressure, and we have cut our 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. more than 30% year over year. Impairment charges also were less of a factor for us in 2003 because of our early action in prior years to reduce manufacturing capacity, which required the closure of only one plant during 2003. Despite this downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing of our manufacturing capacity, we did not sacrifice our ability to provide needed product to our dealers from remaining plants, except for our withdrawal from the Northeast market concurrent with the closing of our plant in Shippenville, Pennsylvania Shippenville is a borough in Clarion County, Pennsylvania, United States. The population was 505 at the 2000 census. Geography Shippenville is located at (41.250919, -79.462534)GR1. ." Relative to the Company's efforts to eliminate unneeded capacity, Roberson noted that the Company sold a significant part of its previously idled manufacturing complex in Belmont, Mississippi Belmont is a town in Tishomingo County, Mississippi, United States. The population was 1,961 at the 2000 census. Its ZIP code is 38827. History The settlement of Belmont was originally called Gum Springs with a post office built in 1884. , during the fourth quarter of 2003. The sale yielded net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $1,283,000, of which $1,000,000 was used to reduce the real estate term loan portion of the Company's credit facility. In connection with the sale, Cavalier recorded in selling, general and administrative expenses for the quarter a loss on disposal of this property totaling $886,000, which accounted for the increase in these expenses between the third and fourth quarters of 2003. The Company also recorded impairment and other related charges in the fourth quarter of 2003 of $574,000, which was primarily related to the remaining portion of the Belmont Belmont (bĕl`mŏnt). 1 City (1990 pop. 24,127), San Mateo co., W Calif., a residential suburb midway between San Francisco and San Jose; laid out 1851, inc. 1926. There is light manufacturing, and the College of Notre Dame (est. property not included in that sale. Subsequent to year's end, Cavalier sold substantially all of the remaining Belmont manufacturing complex, receiving net proceeds of $2,074,000 and realizing no further loss beyond that anticipated with the fourth quarter 2003 impairment charge. The Company used $1,555,000 of these proceeds to further reduce the amount outstanding on the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. portion of its credit facility. "As we look ahead to 2004, we conservatively expect that the market will likely remain sluggish for some time, owing in part to seasonality," Roberson added. "However, we also note some encouraging signals that renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. growth in industry shipments may finally be at hand, which leads us to believe that this winter may mark the low point of the cycle. The national economy is stable and showing signs that a recovery is finally gaining traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. . The recent 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. has reduced excess dealer inventory to the point that an increase in demand will likely translate more directly into new orders. Meanwhile, the market for repossessed homes appears to be firming in both price and quantity. Most important, however, there are clear indications that lenders are beginning to enter or re-enter re·en·ter also re-en·ter v. re·en·tered, re·en·ter·ing, re·en·ters v.tr. 1. To enter or come in to again. 2. To record again on a list or ledger. v.intr. the market, which would provide the necessary liquidity to support a potential 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 sales. It will probably take at least several more months for these positive factors to begin to have a meaningful influence on industry sales and, in fact, we expect to report a loss for the first quarter of 2004 due primarily to the seasonality of the period. Longer-term, however, we believe the prudent steps we have taken to reduce costs and lower our 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 point will position us to return to profitable operations later in 2004 and strengthen our competitive position in the marketplace going forward." Cavalier's revenue for 2003 declined 36% to $247,836,000 from $387,257,000 in 2002. Home manufacturing sales fell 37% to $237,215,000 for the period versus $375,385,000 last year. Floor shipments for 2003 declined 43% to 12,411 floors compared with 21,703 floors in 2002. The Company's pre-tax loss for 2003 was $5,088,000, inclusive of impairment and other related charges totaling $750,000. In 2002, the Company's pre-tax loss was $14,792,000, inclusive of impairment and other related charges totaling $6,064,000, which were partially offset by a benefit from the settlement of an insurance claim totaling $1,163,000. For 2003, Cavalier recorded an income tax benefit of $518,000 compared with income tax expense of $5,716,000 for 2002. The Company's loss for 2003 was $4,570,000 or $0.26 per diluted share, versus a loss before the cumulative effect of a change in accounting principle of $20,508,000 or $1.16 per diluted share in 2002. In the first quarter of 2002, Cavalier posted a charge of $14,162,000, net of taxes, or $0.80 per diluted share, to record the cumulative effect of a change in accounting principle, eliminating all of the Company's goodwill on the balance sheet at the beginning of the quarter pursuant to the provisions of 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. ." Therefore, the Company's net loss for 2002, giving effect to the change in accounting principle, was $34,670,000 or $1.96 per diluted share. Mike Murphy, Cavalier's Chief Financial Officer, noted that Cavalier ended the year with cash totaling $32,393,000 versus $34,939,000 a year ago. Inventories declined 40% to $10,964,000 at December 31, 2003, from $18,287,000 at the end of 2002, matching the decline in sales during the year. Likewise, dealer inventory, including inventory at the Company's three retail sales centers, declined 34% to approximately $100,000,000 from $151,000,000 a year ago. 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. Murphy, Cavalier has reduced its 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. , including Industrial Development Bonds, by $7,454,000 during the past year, from $23,990,000 to $16,536,000. At December 31, 2003, the Company had $8,895,000 outstanding under the $10,000,000 long-term component of its credit facility. None of the $25,000,000 revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. component was outstanding at quarter's end, under which $9,181,000 was currently available based on underlying collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although . Cavalier was in full compliance with all terms and conditions of the credit facility as of December 31, 2003. Separately, the Company announced that its common stock has been accepted for listing on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. . It is anticipated that Cavalier's common stock will begin trading on the Amex under the symbol CAV on March 5, 2004. The last trading day Last Trading Day The final day that a futures or options contract may trade or be closed out before delivery of the underlying asset must occur. Notes: If the buying and selling parties do not arrange an alternate agreement, the physical commodity must be delivered from for Cavalier's stock on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. will be March 4, 2004. Commenting on the move to the Amex, Roberson said, "We are pleased to announce our listing with the American Stock Exchange and see it as an attractive step to help ensure that our stockholders continue to benefit from an efficient and liquid market for our common stock. The change will not result in any interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. in the trading in our stock as the transition should be seamless and transparent for our stockholders." Last year, Roberson noted, Cavalier reported that it had fallen below the NYSE continued listing standards with respect to market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. of $50 million and total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $50 million. Subsequently, the NYSE accepted the Company's proposed plan to re-establish re-establish Verb to create or set up (an organization, link, etc.) again re-establishment n compliance with the then-applicable NYSE's continued listing standards over an 18-month period. While Cavalier's market capitalization has rebounded above original NYSE requirements, continued adverse market conditions have maintained pressure on industry sales and have constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. profitability, thus somewhat limiting the Company's progress with regard to stockholders' equity. Although the Company has made significant progress in its operations and has been successful in continuing its listing to date, the NYSE recently has proposed changes to its continued listing criteria that will raise the thresholds for both market capitalization and stockholders' equity to $75 million. As such, the Company believes continued listing on the NYSE, against the backdrop Backdrop may refer to:
Requirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading. of the Amex, the Company believes that ensuring the future trading liquidity of the Company's stock will be better achieved by changing its listing to the Amex. Cavalier also noted that it has moved the record date for the Company's 2004 annual meeting to March 22, 2004, from March 19, 2004, as previously announced. The date of the annual meeting remains May 19, 2004. Cavalier Homes, Inc. and its subsidiaries produce, sell, and finance 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 . The Company markets its homes primarily through independent dealers, including exclusive dealers that carry only Cavalier products, and provides 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. primarily to retail purchasers of manufactured homes sold through its dealer network. A public, listen-only simulcast of Cavalier Homes' year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. quarter conference call will begin at 9:30 a.m. Eastern Time tomorrow (March 4, 2004) and may be accessed via the Company's web site, www.cavalierhomebuilders.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 April 4, 2004. With the exception of historical information, the statements made in this press release, including those containing the words "believe," "know," "will," "should," 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 several 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; 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 31, 2002, under the heading "Item 1. Business-Risk Factors," and its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended September September: see month. 27, 2003, under the heading "Safe Harbor Statement under the Private Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995," 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)
Fourth Quarter Ended Year Ended
December 31, December 31,
--------------------- ---------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenue $ 56,041 $ 87,008 $ 247,836 $ 387,257
Income (loss) before income
taxes 1,139 (11,649) (5,088) (14,792)
Income taxes (benefit) 61 9,339 (518) 5,716
---------- ---------- ---------- ----------
Income (loss) before
cumulative effect of
change in accounting
principle 1,078 (20,988) (4,570) (20,508)
Cumulative effect of change
in accounting principle,
net of tax benefit of
$1,306 -- -- -- (14,162)
---------- ---------- ---------- ----------
Net income (loss) $ 1,078 $ (20,988) $ (4,570) $ (34,670)
---------- ---------- ---------- ----------
Basic and diluted income
(loss) per share:
Income (loss) before
cumulative effect of
change in accounting
principle $ 0.06 $ (1.19) $ (0.26) $ (1.16)
Cumulative effect of
change in accounting
principle -- -- -- (0.80)
---------- ---------- ---------- ----------
Net income (loss) $ 0.06 $ (1.19) $ (0.26) $ (1.96)
========== ========== ========== ==========
Weighted average shares -
basic 17,668 17,666 17,666 17,665
========== ========== ========== ==========
Weighted average shares -
diluted 17,721 17,666 17,666 17,665
========== ========== ========== ==========
Cavalier Homes, Inc. Data Sheet - Unaudited
(In thousands, except per share amounts)
Fourth Quarter Ended Year Ended
December 31, December 31,
-------------------- ------------------
STATEMENT OF OPERATIONS 2003 2002 2003 2002
SUMMARY --------- --------- -------- ---------
Home manufacturing net sales $ 53,178 $ 84,266 $237,215 $375,385
Financial services 665 788 2,673 2,690
Retail 2,198 1,954 7,948 7,908
Other -- -- -- 1,274
--------- --------- -------- ---------
Total revenue $ 56,041 $ 87,008 $247,836 $387,257
========= ========= ======== =========
Cost of sales 44,542 76,710 208,687 332,964
--------- --------- -------- ---------
Gross profit 11,499 10,298 39,149 54,293
Selling, general and
administrative 9,828 15,695 43,171 62,649
Impairment and other related
charges 574 6,064 750 6,064
--------- --------- -------- ---------
Operating profit (loss) 1,097 (11,461) (4,772) (14,420)
--------- --------- -------- ---------
Other income (expense):
Interest expense (300) (373) (1,065) (1,495)
Other, net 342 185 749 1,123
--------- --------- -------- ---------
42 (188) (316) (372)
--------- --------- -------- ---------
Income (loss) before income
taxes 1,139 (11,649) (5,088) (14,792)
Income taxes (benefit) 61 9,339 (518) 5,716
--------- --------- -------- ---------
Income (loss) before cumulative
effect of change in accounting
principle 1,078 (20,988) (4,570) (20,508)
Cumulative effect of change in
accounting principle, net of
tax benefit of $1,306 -- -- -- (14,162)
--------- --------- -------- ---------
Net income (loss) $ 1,078 $ (20,988) $ (4,570)$(34,670)
========= ========= ======== =========
Basic and diluted income (loss)
per share:
Income (loss) before
cumulative effect of change
in accounting principle $ 0.06 $ (1.19) $ (0.26)$ (1.16)
Cumulative effect of change
in accounting principle -- -- -- (0.80)
--------- --------- -------- ---------
Net income (loss) $ 0.06 $ (1.19) $ (0.26)$ (1.96)
========= ========= ======== =========
Weighted average shares
outstanding - basic 17,668 17,666 17,666 17,665
========= ========= ======== =========
Weighted average shares
outstanding - diluted 17,721 17,666 17,666 17,665
========= ========= ======== =========
Cavalier Homes, Inc. Data Sheet - Unaudited (Continued)
(In thousands, except per share amounts)
Fourth Quarter Ended Year Ended
OPERATING DATA SUMMARY December 31, December 31,
-------------------- --------------------
Manufacturing sales: 2003 2002 2003 2002
--------- --------- ---------- ---------
Floor shipments 2,576 4,644 12,411 21,703
Home shipments:
Single section 150 393 873 2,235
Multi-section 1,213 2,125 5,769 9,734
--------- --------- ---------- ---------
Total shipments 1,363 2,518 6,642 11,969
Shipments to company-owned
retail locations (42) (55) (140) (187)
--------- --------- ---------- ---------
Wholesale shipments to
independent retailers 1,321 2,463 6,502 11,782
========= ========= ========== =========
Retail sales:
Single section 14 20 51 73
Multi-section 39 34 154 145
--------- --------- ---------- ---------
Total sales 53 54 205 218
========= ========= ========== =========
Cavalier produced homes sold 44 46 179 188
========= ========= ========== =========
Used homes sold 9 8 26 30
========= ========= ========== =========
Independent exclusive dealer
locations 129 220 129 220
Company-owned stores 3 4 3 4
Home manufacturing facilities
-- operating 7 8 7 8
Installment loan purchases $ 8,979 $ 11,581 $ 37,780 $ 45,054
BALANCE SHEET SUMMARY
Cash and cash equivalents $ 32,393 $ 34,939
Accounts receivable, less
allowance for losses 1,939 3,353
Inventories 10,964 18,287
Other current assets 5,810 16,041
---------- ---------
Total current assets 51,106 72,620
---------- ---------
Property, plant and
equipment, net 37,192 50,357
Installment contracts
receivable, less allowance
for credit losses 6,846 4,058
Other assets 3,389 3,036
---------- ---------
Total assets $ 98,533 $130,071
========== =========
Current portion of long-term debt $ 3,447 $ 1,347
Notes payable -- 67
Other current liabilities 39,846 58,860
---------- ---------
Total current liabilities 43,293 60,274
---------- ---------
Deferred income taxes 693 1,083
Long-term debt 13,089 22,643
Other long-term liabilities 471 535
Stockholders' equity 40,987 45,536
---------- ---------
Total liabilities and
stockholders' equity $ 98,533 $130,071
========== =========
OTHER INFORMATION
Working capital $ 7,813 $ 12,346
Current ratio 1.2 to 1 1.2 to 1
Number of shares outstanding 17,676 17,666
Stockholders' equity per share $ 2.32 $ 2.58
CIS installment loan portfolio $ 10,114 $ 10,977
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