Coachmen Industries, Inc. Announces Much-Improved Fourth Quarter 2009 Results

ELKHART, Ind., Feb. 16 /PRNewswire-FirstCall/ — Coachmen Industries, Inc. (OTC: COHM) today announced its financial results for the fourth quarter of 2009, ending December 31, 2009.

The Company has revised its financial results from the news release previously issued on February 1, 2010. The revision was related to the accounting treatment of the loan agreement described below, and resulted in balance sheet classification changes, and a non-cash charge to earnings.

On October 27, 2009, the Company completed a two year $20.0 million loan agreement as borrowers with H.I.G. All American, LLC for a $10.0 million revolving note and $10.0 million in convertible notes. In connection with the convertible notes, the Company issued to H.I.G. approximately 6.7 million Common Stock Purchase Warrants. The convertible notes also contain a beneficial conversion feature. The fair value of the warrants and the beneficial conversion feature were determined to be $7.6 million and $5.4 million, respectively, and the resulting $13.0 million has been recorded as a liability on the balance sheet in accordance with generally accepted accounting principles (ASC 815-40-15). The Company recorded a debt discount on the convertible notes for the full $10.0 million due to the issuance of the warrants and beneficial conversion feature whose fair value exceeded the value of the debt. The difference between the debt discount of $10.0 million and the fair value of the warrants and the beneficial conversion feature of $13.0 million resulted in $3.0 million being recorded as a non-cash interest expense during the 4th quarter. At December 31, 2009, the Company has not borrowed against the revolving note and  the $10 million in convertible debt, which has been borrowed, will be accreted to the balance sheet over the 2 year life of the loan agreement.

“The housing markets may have stopped their freefall, but they have not yet begun to improve. Quarterly sales in our primary housing business were 44% less than what they were in the same quarter in 2008,” commented Richard M. Lavers, President and Chief Executive Officer. “Nonetheless, we improved our gross profit significantly year over year, and our losses in the fourth quarter were about 1/10th of the prior year’s loss. Our Specialty Vehicles business is showing significant growth, with quarterly sales revenue up more than 365% as compared to the same quarter last year. These improvements show that we remain headed in the right direction, despite general economic conditions.”

Net sales from continuing operations for the fourth quarter were $15.5 million compared to $18.9 million reported for the same period in 2008. Gross profits for the quarter were $1.13 million or 7.3% of revenues, compared to a gross profit of $36,000 or 0.19% of revenues for the fourth quarter of 2008. The Company reported a net loss from continuing operations of ($6.09) million, or ($0.38) per share, versus a net loss from continuing operations of ($19.1) million, or ($1.21) per share in the fourth quarter of 2008. Net loss, including discontinued operations, was ($5.9) million, or ($0.37) per share in the fourth quarter of 2009, versus a net loss of ($52.9) million, or ($3.35) per share in the fourth quarter of 2008.

Housing Group

“While the Housing Group’s single-family homes business remains adversely affected by the nationwide housing market, we have been successful at receiving contracts for several major projects, which are reflected in our fourth quarter results,” commented Housing Group President Rick Bedell. “We continue to pursue a number of major project opportunities, and expect that these opportunities will help us better utilize our factories when the slump in the single-family housing market ends.”

Specialty Vehicle Group

“While sales of the Spirit of Mobility buses produced for our joint venture ARBOC Mobility remain relatively modest, we are achieving continuous increases in orders and shipments. Our sales in this business segment were up more than four and one half times as compared to the fourth quarter of 2008. We expect this segment of our business will continue to grow during 2010,” stated Lavers.

Coachmen Industries, Inc., doing business as All American Group, is one of America’s premier systems-built construction companies under the ALL AMERICAN BUILDING SYSTEMS