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Featherlite Reports Record Net Income in Fiscal 1997

11 February 1998

Featherlite Reports Record Net Income in Fiscal 1997

    Net Sales Climb 35 percent to $134 Million, Led by 56-percent Rise in
                  Sales Related to the Motorsports Industry

    CRESCO, Iowa, Feb. 11 -- Featherlite Mfg., Inc.
, a leading manufacturer and marketer of specialty aluminum
trailers and luxury motorcoaches, today reported net sales for the year ended
Dec. 31, 1997, of $134.4 million, up 35.3 percent from net sales of
$99.3 million last year. Net income for the year was $3.3 million, or 52 cents
per diluted share, up nearly four-fold from net income of $842,000, or
13 cents per diluted share, last year.
    Conrad Clement, chairman and chief executive officer, said, "We are very
pleased with this performance and the validation of our business strategy that
it represents.  As a result of our strategic focus on motorsports and other
leisure, recreation and entertainment markets, three-quarters of our sales are
now in these high growth sectors.  We have added new models in all segments
which enabled us to achieve a balanced diversity that yielded our very strong
performance in fiscal 1997."
    Featherlite's fiscal 1997 net sales increased $35.1 million over 1996,
$19.6 million of which was contributed by Vantare, a leading producer of
luxury motorcoaches.  Vantare was acquired by Featherlite in the third quarter
of 1996.  The balance of the sales increase over 1996, $15.5 million, resulted
from growth in established product categories, led by a strong increase of
56 percent in car/race car and specialty transporters.  Sales of horse
trailers increased by 5 percent over last year, livestock trailer sales grew
21 percent, and utility/recreational trailer sales increased 24 percent.
Sales of commercial trailers declined 29 percent compared with last year, due
to the discontinuation of less profitable commercial trailer  models.
    Gross profit margin for the year was 16.8 percent of sales, compared with
14.8 percent last year.  The improvement in gross profit margin reflects lower
raw material costs -- due to changes in the company's product mix, the
discontinuation of less profitable lines, and the benefit of extended-term
contracts for aluminum -- and improved labor efficiencies.  Selling and
administrative expenses were 12.0 percent of sales, down from 12.6 percent
last year, despite additional marketing expenses, primarily at Vantare.
    "Our strong financial performance during the year was matched by
significant progress in further strengthening Featherlite for the future,"
Clement said  "We completed the integration of Vantare into Featherlite's
operations, introduced new features and models in our established specialty
trailer lines, launched the Featherlite/GMR Sports Group joint venture to
further capitalize on our presence in motorsports and continued to improve the
quality of our dealer network."
    For the fourth quarter ended Dec. 31, 1997, net sales were $35.0 million,
an increase of 17.4 percent from net sales of $29.8 million in last year's
fourth quarter. Net income for the fourth quarter was $1,023,000, or 16 cents
per diluted share, up 79 percent from net income of $571,000, or 9 cents per
diluted share, in the fourth quarter of last year.  At the end of the fourth
quarter, Featherlite had a production backlog of $27 million, nearly equal to
last year's backlog of approximately $28 million.
    "We have entered 1998 with the expectation of another strong and rewarding
year for Featherlite," Clement said.  "And we are very pleased with the growth
opportunities that have resulted from the product diversification and
strategic repositioning that we have accomplished.  We expect to continue to
benefit from strong growth in the motorsports industry and are strategically
prepared to capitalize on growth opportunities in all of our markets.  By
continuing to leverage our expertise in manufacturing, design, marketing and
brand development across all of our market segments:  leisure, recreation,
entertainment and agribusiness, including our industry-leading lines of
livestock and horse trailers, we are optimistic about achieving our objectives
in the future.
    "We also have opportunities for additional gross margin expansion,
supported by fixed-cost aluminum contracts that are already in place to
fulfill our 1998 production goals, and growing production efficiencies in
custom-designed product manufacturing," Clement said.

    About Featherlite
    Featherlite is an innovative leader in designing, manufacturing and
marketing high quality aluminum specialty trailers, transporters and luxury
motorcoaches.  With three-quarters of its business in the leisure, recreation
and entertainment categories, Featherlite has highly diversified product lines
offering standard model aluminum specialty trailers and custom-designed
trailers, transporters and motorcoaches.  Featherlite is the "Official
Trailer" of NASCAR, Championship Auto Racing Teams (CART), Indy Race League
(IRL), SPORTSCAR, Automobile Racing Club of America (ARCA), American Speed
Association (ASA) and World of Outlaws (W.O.O.).  Vantare, Featherlite's
luxury motorcoach division, is the "Official Coach" of NASCAR, IRL and
SPORTSCAR.  For more information about the company, please visit Featherlite's
website at http://www.featherlitemfg.com

    Featherlite Mfg., Inc.
    Condensed Statements of Income
    (In thousands, except per share data)

                             Three Months Ended             Year ended
                                  Dec. 31,                     Dec. 31,
                             1997           1996         1997          1996
                              (unaudited)
    Net sales              $34,973       $29,800     $134,387       $99,329
    Cost of sales           28,448        24,774      111,764        84,643
    Gross profit             6,525         5,026       22,623        14,686
    Selling and
     administrative expenses 4,366         3,909       15,998        12,492
    Income from operations   2,159         1,117        6,625         2,194
    Other income (expense)
    Interest                 (580)         (398)      (1,800)       (1,450)
    Gain on aircraft and
     other sales               (5)            60          264            60
    Grant and other income, net132           181          382           600
    Total other income, net  (453)         (157)      (1,154)         (790)
    Income before taxes      1,706           960        5,471         1,404
    Provision for income taxes 683           389        2,189           562
    Net income              $1,023          $571       $3,282          $842
    Net income per common and
    common equivalent share --
    Basic and Diluted        $0.16         $0.09        $0.52         $0.13

    Weighted average shares
    outstanding:
    Basic                    6,255         6,255        6,255         6,106
    Diluted                  6,330         6,259        6,314         6,107


    Featherlite Mfg., Inc.
    Condensed Balance Sheets
    (In thousands)
                                Dec. 31, 1997           Dec. 31, 1996
    ASSETS
    Current assets
    Cash                           $1,632                    $256
    Trade receivables               7,050                   6,783
    Inventories                    39,664                  25,235
    Prepaid expenses                1,110                   1,094
    Deferred taxes                    824                     481
    Total current assets           50,280                  33,849
    Property and equipment         20,460                  17,687
    Less accumulated depreciation (6,280)                 (4,914)
    Property and equipment, net    14,180                  12,773
    Goodwill and other assets      11,048                   6,912
    Total assets                  $75,508                 $53,534


    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Current maturities of
     long-term debt                $1,173                  $1,146
    Short term notes                6,515                   2,255
    Accounts payable               11,984                   9,776
    Customer deposits               3,585                   2,157
    Accrued liabilities             5,380                   3,350
    Total current liabilities      28,637                  18,684
    Bank credit line                9,800                   9,100
    Other long-term debt,
     net of current maturities     12,275                   4,246
    Deferred grant income             237                     310
    Deferred taxes                    682                     599
    Shareholders' equity           23,877                  20,595
    Total liabilities and
    shareholders' equity          $75,508                 $53,534

    Safe Harbor Statement under the Private Securities Litigation Reform Act:
Statements in this release looking forward in time involve risks and
uncertainties discussed here and in the company filings with the Securities
and Exchange Commission, including product acceptance and demand in each
segment of the Company's markets, the price of aluminum, competition, and
facilities utilization.

SOURCE  Featherlite Mfg., Inc.