Cavalier Reports Fourth Quarter and Year-End Results.Business Editors ADDISON, Ala.--(BUSINESS WIRE)--Feb. 22, 2000 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 its results for the fourth quarter and year ended December 31, 1999. As expected, the Company's results reflected the adverse impact of intense competitive conditions, the ongoing contraction of dealer locations, tightened credit standards Credit Standards The guidelines a company follows to determine whether a credit applicant is creditworthy. and over-supply at the retail level, among other factors, all of which contributed to significantly lower shipments and revenue for the periods reported. Revenue for the fourth quarter totaled $121,190,000, down 26% from $163,380,000 in the year-earlier period. Before a special charge for idled facilities, the Company's net loss in the fourth quarter was $1,971,000 or $0.11 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 $5,324,000 or $0.27 per diluted share in the comparable period last year, on 9% fewer weighted average shares outstanding. After the special charge, the Company's net loss for the fourth quarter of 1999 was $3,550,000 or $0.20 per diluted share. These results are in line with the press release issued by the Company earlier this month. Revenue for the full year declined 4% to $587,800,000 from $614,070,000 in 1998. Before special charges for idled facilities in the third and fourth quarters, the Company's income from operations for 1999 was $4,608,000 or $0.26 per diluted share compared with $18,655,000 or $0.93 per diluted share in 1998, on 10% fewer weighted average shares outstanding. After special charges, net income for 1999 declined to $2,150,000 or $0.12 per diluted share. Cavalier said shipments fell 6% to 34,294 floors in 1999 versus 36,517 in the year-earlier period, representing a total of 22,377 homes compared with 24,387 in 1998. Multi-section homes rose to 53% of total home shipments in 1999 versus 49% in 1998. David Roberson, President and Chief Executive Officer, said, "With inventory at the retail level remaining high, continued tightening of credit standards by lenders, and fewer lenders remaining in the market, the downturn in shipments that began in mid-1999 intensified during the fourth quarter. While industry statistics reflect that shipments declined more than 6% in 1999, the deterioration in sales trends accelerated at the end of the year, with statistics showing that industry's wholesale shipments fell 20% in December alone. Unfortunately, Cavalier has not escaped the impact of this industry slowdown. "Cavalier has continued to take the steps we believe are appropriate to adjust our operations to current market conditions and maintain operational and financial flexibility. These measures are important not only to weather the current downturn, but also to maintain a strong financial position that would enable the Company to take advantage of opportunities when market conditions improve. With the seasonally slow winter months ahead of us, a glut glut pronounced as rut, slut Vox populi An excess of a service or skilled labor in a particular area. See Physician glut. of retail inventory, and the expectation that dealer failures will continue, we cannot predict with certainty when conditions will improve. It seems unlikely, however, that meaningful changes will occur in the first half of 2000." Roberson said that, because of current conditions, Cavalier's wholesale shipments have declined over 40% through the first seven weeks of 2000 from the year-earlier period. This trend reflects both the ongoing weakness in sales and the fact that year-over-year comparisons are against particularly strong results in the early months of 1999, before the cycle expansion peaked at midyear mid·year n. 1. The middle of the calendar or academic year. 2. a. An examination given in the middle of a school year. b. midyears A series of such examinations. . Roberson noted that, because of deteriorating market conditions, the Company has idled a total of five plants that built primarily single-section homes, including three subsequent to the fourth quarter. The Company's results for the fourth quarter and full year 1999 include special charges recorded in connection with these plant idlings, which totaled $2,549,000 ($1,579,000 or $0.09 per diluted share after tax) and $4,002,000 ($2,458,000 or $0.14 per diluted share after tax) for the quarter and year, respectively. Cavalier currently has 19 home manufacturing plants in operation. "Our move to idle these plants allows us to consolidate operations for greater efficiency, without sacrificing products or price points," he added. "However, our lower volume continues to have an adverse impact on operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. , as seen by deteriorating gross margins and a relatively higher level of 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. when compared with current revenues. We are continuing to take steps to take action; to move in a matter. See also: Step to reduce our cost structure so as to align our operations with prevailing retail conditions, but we intend to maintain our support of our exclusive dealer program and the implementation of an enterprise-wide management information system, since we believe these initiatives are strategic to the long-term growth and success of the Company." Barry Donnell, Chairman of Cavalier Homes, pointed out that the Company has focused on balance sheet strength in the face of soft market conditions. "Cavalier ended 1999 with almost $40 million in cash. Our 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. also remained relatively low at approximately $10 million at year-end." Donnell noted that Cavalier repurchased approximately 1.8 million shares of its common stock during 1999 under a Board-authorized four-million share stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. Cavalier has continuing authorization to repurchase approximately 1.4 million shares under this program. Cavalier Homes, Inc. and its subsidiaries are engaged in the production, sale, financing and insuring of 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 currently operates 19 home manufacturing facilities and markets its homes in 28 states through about 1,000 independent dealers operating almost 1,100 sales centers, including 279 exclusive dealer locations, of which 16 are Company-owned stores. Through its 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. segment, the Company purchases qualifying retail installment sale Installment sale The sale of an asset in exchange for a specified series of payments (the installments). installment sale A sale in which the buyer is scheduled to make a series of payments over a period of time. contracts for manufactured homes sold through its exclusive dealer network and offers insurance products to exclusive dealers and their retail customers. A public, listen-only simulcast and replay of Cavalier Homes' year-end conference call can be accessed at the Company's web site, www.cavhomesinc.com, or www.streetevents.com, www.streetfusion.com, or www.vcall.com. The simulcast will begin at 9:30 a.m. Eastern Time tomorrow (February 23, 2000) and a replay of the call will be available beginning at noon Eastern Time on that day and continuing for 20 days. With the exception of historical information, the statements made in this press release, including those containing the words "anticipates," "expects," "plans," "believes," and words of similar import, and those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc expected results for the first quarter of 2000 and future quarters, industry trends and conditions, and the long-term effect of Company initiatives, 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 Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended October 1, 1999, under the heading "'Safe Harbor' Statement under the Private Securities Litigation Reform Act of 1995," and its 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, 1998, under the headings "Item 1. Business-Risk Factors" and "'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," both as filed with the Securities and Exchange Commission, and in 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 data)
Fourth Quarter Ended Year Ended
December 31, December 31,
1999 1998 1999 1998
Revenue $ 121,190 $ 163,380 $ 587,800 $ 614,070
Income (loss)
before income
taxes (benefit) (5,868)(a) 8,894 3,553(a) 31,282
Net income (loss) (3,550)(a) 5,324 2,150(a) 18,655
Net income (loss)
per share -
diluted (0.20)(a) 0.27 0.12(a) 0.93
Weighted average
shares - diluted 17,861 19,735 18,204 20,144
(a) The Company's decision to idle five home manufacturing plants
during the year, including three recorded as a special charge in the
fourth quarter of 1999, negatively impacted results for the fourth
quarter and year ended December 31, 1999, by $2,549,000 ($1,579,000 or
$0.09 per diluted share after tax) and $4,002,000 ($2,458,000 or $0.14
per diluted share after tax), respectively.
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