Featherlite Reports Record Net Income in Fiscal 1997
11 February 1998
Featherlite Reports Record Net Income in Fiscal 1997Net 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.