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Featherlite Reports $1.1 Million Second Quarter Net Income

CRESCO, Iowa--July 26, 2005--Featherlite, Inc. , a leading manufacturer and marketer of specialty aluminum trailers, transporters and luxury motorcoaches, today reported net income of $1.1 million, or 9 cents per diluted share, for the second quarter ended June 30, 2005. This compares with net income of $1.5 million, or 13 cents per diluted share, for the same period in 2004. The decrease in net income was primarily the result of lower gross profit in both the trailer and motorcoach segments, partially offset by reductions in selling and administrative expenses. While the trailer segment maintained unit sales volume for the quarter, its net income was negatively impacted by greater than anticipated aluminum and other cost increases not sufficiently compensated for by production efficiencies or product price increases. Motorcoach segment net income declined as the result of reduced new and used motorcoach unit sales volume.

Net income for the first six months of 2005 was $2.5 million compared with $2.7 million for the same period in 2004. On a diluted per share basis, the Company earned 22 cents in the first six months of fiscal 2005 compared to 24 cents for the same period in 2004.

Net sales for the second quarter ended June 30, 2005 were $52.0 million, a decline of 10.6 percent over the $58.2 million reported in the same period last year. Net sales of $110.5 for the first six months of 2005 were down 3.6 percent from $114.6 million posted in the same period last year.

"After posting six consecutive quarters of earnings gains over comparable quarters in the prior year, we were disappointed that the second quarter of 2005 did not meet expectations," Conrad Clement, Featherlite president and CEO, said. "However, we remain cautiously optimistic about the level of sales for the remaining quarters of 2005.

"We are encouraged by an increase in the motorcoach backlog to $9.2 million at June 30, 2005 compared to $5.4 million at June 30, 2004. Trailer backlog has decreased to $16.3 million compared to $21.7 million last year, but order levels have remained strong and have been filled from increased finished goods inventory. We anticipate an enthusiastic reception to the new and enhanced 2006 models now arriving at our trailer dealers and coach showrooms. Featherlite continues to introduce exciting product innovations that can capitalize on the industry's growing leisure and recreation segment, a prime target market for the Company."

About Featherlite

With more than 75 percent of its business in the leisure, recreation and entertainment categories, Featherlite(R), Inc. has highly diversified product lines offering hundreds of standard model and custom-designed aluminum specialty trailers, specialized transporters, mobile marketing trailers and luxury motorcoaches. For more information about the Company, please visit www.fthr.com.


       Featherlite, Inc.
       Condensed Balance Sheets
       (Unaudited)
       (In thousands)
                                                     June 30,  Dec 31,
       ASSETS                                          2005     2004
                                                     --------  -------
Current assets
  Cash                                              $    113  $   179
  Receivables                                          7,837    4,781
  Refundable income taxes                                497      497
  Inventories                                         63,756   61,730
  Leased promotional trailers                          1,599    1,669
  Prepaid expenses                                     1,016    1,827
  Deferred tax asset                                   1,274    1,275
                                                     --------  -------
  Total current assets                                76,092   71,958
Property and equipment,net                            16,783   16,003
Other assets                                           3,379    4,252
                                                     --------  -------
                                                    $ 96,254  $92,213
                                                     ========  =======


       LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities
  Wholesale financing and other notes payable       $ 22,612  $22,106
  Current maturities of long-term debt                 1,745    1,699
  Checks issued not yet presented                      5,286    2,900
  Accounts payable                                     5,139    4,323
  Motorcoach shell costs payable                       5,548    7,277
  Accrued liabilities                                  7,985    9,124
  Customer deposits                                    1,801    2,698
                                                     --------  -------
  Total current liabilities                           50,116   50,127
Bank line of credit                                    5,609    4,243
Other long-term debt, net of current maturities       11,043   11,092
Deferred tax liabilities                               1,340    1,340
Other long-term liabilities                               41       48
Shareholders' equity                                  28,105   25,363
                                                     --------  -------
                                                    $ 96,254  $92,213
                                                     ========  =======


       FEATHERLITE, INC
       Condensed Statements of Income
       (Unaudited)
    (In Thousands, except for per share data)

                                Three months Ended   Six months Ended
                                      June 30,            June 30,
                                ------------------  ------------------
                                  2005      2004      2005      2004
                                --------  --------  --------  --------


Net Sales                      $ 51,993  $ 58,151  $110,473  $114,567
Cost of Sales                    44,159    49,019    92,994    96,806
                                --------  --------  --------  --------
  Gross profit                    7,834     9,132    17,479    17,761
Selling and administrative
 expenses                         5,510     6,243    12,291    12,466
                                --------  --------  --------  --------
  Income from operations          2,324     2,889     5,188     5,295
Other income(expense)
  Interest                         (704)     (580)   (1,335)   (1,128)
  Other, net                        104        58       239       130
                                --------  --------  --------  --------
  Total other expense              (600)     (522)   (1,096)     (998)
                                --------  --------  --------  --------
Income before taxes               1,724     2,367     4,092     4,297
Minority interest in subsidiary      11        20        (1)       51
Provision for income taxes         (660)     (884)   (1,555)   (1,609)
                                --------  --------  --------  --------
  Net income                   $  1,075  $  1,503  $  2,536  $  2,739
                                ========  ========  ========  ========



Net income(loss)per share-
    Basic                      $   0.10  $   0.14  $   0.23  $   0.25
                                --------  --------  --------  --------
    Diluted                    $   0.09  $   0.13  $   0.22  $   0.24
                                --------  --------  --------  --------

Weighted average shares
 outstanding -
    Basic                        10,930    10,813    10,909    10,804
                                --------  --------  --------  --------
    Diluted                      11,788    11,526    11,738    11,438
                                --------  --------  --------  --------

On April 9, 2005 the Company's Board of Directors declared a three for two split of the Company's common stock with a proportional increase in the number of issued and outstanding shares, effective May 4, 2005 to shareholders of record as of the close of business on April 22, 2005. All shares are per share amounts have been restated to reflect the retroactive effect of the stock split.