Featherlite Announces Year-End Results
CRESCO, Iowa, Feb. 21 Featherlite, Inc. , a
leading manufacturer and marketer of specialty aluminum trailers and luxury
motorcoaches, announced today that it would report a $9.9 million loss, or
$1.51 per diluted share, for 2000, which is consistent with the range
estimated by the company in a news release dated Feb. 9, 2001. The company
posted $4 million in net income in 1999, or 61 cents per diluted share. The
announcement came as Featherlite achieved record sales of $243.9 million with
a net sales increase of 8.5 percent in 2000.
The 2000 results included fourth quarter non-cash charges of
$10.4 million, principally related to asset impairment writedowns in its
motorcoach division. Included in the writedowns is an $8.4 million charge
against unamortized goodwill associated with prior acquisitions of Mitchell
Motor Coach Sales in 1998 and Vantare International, Inc. in 1996, and the
writedown of certain new and used motorcoach inventories. Conrad Clement,
Featherlite's president and CEO, said, "These writedowns on luxury coach
inventory were triggered in part by the country's economic slowdown in the
last half, as well as other adverse operating factors which indicated a
potential impairment in these asset values." Impairment reviews of the assets
of certain business units in the trailer segment also resulted in the
writedown of goodwill and other long-lived assets.
For the fourth quarter ended Dec. 31, 2000, net sales were $56.6 million,
essentially unchanged from net sales of $56.0 million in the fourth quarter
last year. Net income for the fourth quarter declined to a loss of
$11 million or $1.69 per share, from net income of $374,000 or 6 cents per
share last year.
Featherlite's 2000 sales of $243.9 million reflect a growth of
$19.1 million above last year's $224.8 million. The 2000 revenue increases
reflect an 11.5 percent gain in trailer sales and a 5 percent gain in new and
pre-owned luxury motorcoach sales. Gross margin in 2000 decreased by
7.8 percent to $29.7 million compared to $32.2 million in 1999 due to the
$1.6 million inventory writedown described above, among other factors. As a
percentage of sales, consolidated gross profit margin was 12.2 percent in 2000
and 14.3 percent in 1999. Selling and administrative expenses were increased
in 2000 to 10.9 percent from 10.2 percent.
In 2000, the company continued the implementation of strategic initiatives
begun in 1999 to restructure the motorcoach division. In addition, it
recently announced in January 2001 a plan to consolidate the company's Prevost
coach conversion manufacturing operations from Pryor, Okla., to its Sanford,
Fla., facility. At the end of the first quarter of 2001, Featherlite will
manufacture its Vantare XLII Prevost motorcoach conversions in Sanford, where
Featherlite's Vantare H3-45 coaches are now produced. The Pryor facility will
focus on the development and production of the Featherlite Vogue series,
including the new Vogue 6000LX, which was introduced during the NASCAR NAPA
500 in November.
"By moving all the Vantare production to our Florida plant, we will
eliminate a layer of management and certain redundant expenses," Clement said.
"An estimated 150 salaried and hourly jobs will be eliminated at Pryor,
effective approximately March 15, 2001. These payroll reductions, plus
expense reductions in other areas, could reduce the division's overall cost
structure by an estimated $3 million."
Despite initiatives taken early in 2000, including management changes in
the motorcoach division and the introduction of programs to improve the
production efficiency and to reduce and improve production and selling costs,
a downturn in the motorcoach market resulted in continuing losses of sales and
profitability in this segment. Increased interest rates, higher fuel costs
and stock market volatility are believed to be factors contributing to the
decrease, which began in the third quarter of 2000. Demand for luxury
motorcoaches may continue to be affected into 2001.
Looking Forward
"Featherlite has maintained and enhanced its strength in key areas related
to future financial performance," Clement said. "In 2000 we saw a continuing
advance in the already-dominant Featherlite specialty trailers brand in three
highly visible arenas: in the horse, stock and motorsports industries.
Additionally, we added a record number of new dealers. We expect this to
further improve customer access to Featherlite products and enhance customer
services." In 2000, Featherlite announced 24 new and enhanced 2001 trailer
models and will unveil more this year. The company also will announce early
in 2001 new feature enhancements -- unique in the industry -- in its horse
trailer line. This presents the opportunity to increase market share in all
segments in 2001.
Clement also said that the company's brand recognition and close
affiliation with the motorsports industry positions Featherlite for additional
growth in the specialty trailers, transporters and luxury motorcoach segments.
With more than 75 percent of its revenues from end users in motorsports and
leisure/entertainment categories, including horse trailers, and with its solid
position in the livestock trailer market, Clement said the company is
strategically poised to benefit from growth in these markets.
"Due to the current economic conditions, the backlog in coach and trailer
divisions is at lower levels than the same period last year," Clement said.
"Though cautious, we expect our backlog to increase as the economy recovers.
"We are focusing on cost reductions and improving manufacturing operations
in all areas. In the specialty trailer division, the impact of Featherlite's
new manufacturing processes and efficiencies will mean a lowering of retail
costs on certain trailer models without an adverse effect on margins," Clement
said. "Furthermore, by eliminating many redundant operations in our coach
division, combined with our reputation for product innovation, increased
manufacturing efficiencies, superior quality and attention to our customers,
we are confident in our ability and expect to expand our market share. We are
committed to reducing overhead and controlling expenses where necessary to
improve profitability."
Featherlite, Inc.
Condensed Statements of Income
(In thousands, except per share data)
(unaudited)
Three Months Ended Dec. 31, Year Ended Dec. 31,
2000 1999(a) 2000 1999(a)
Net sales $56,582 $56,019 $243,887 $224,813
Cost of sales 52,543 48,771 214,214 192,621
Gross profit 4,039 7,248 29,673 32,192
Selling and
administrative
expenses 6,169 5,712 26,599 22,723
Intangible amortization 164 122 636 520
Asset impairment charges 8,781 0 8,781 0
Income (loss) from
operations (11,075) 1,414 (6,343) 8,949
Other income (expense)
Interest (1,448) (1,103) (4,996) (3,768)
Gain on aircraft
and property sales (11) 26 107 434
Other, net 56 266 640 795
Total other expense (1,403) (811) (4,249) (2,539)
Income (loss) before
income taxes (12,478) 603 (10,592) 6,410
Provision (benefit)
for income taxes (1,462) 229 (728) 2,436
Net income (loss) $(11,016) $374 $(9,864) $3,974
Net income (loss) per
common share:
Basic and diluted $(1.69) $0.06 $(1.51) $0.61
Weighted average
shares outstanding:
Basic and diluted 6,535 6,538 6,531 6,506
a) 1999 figures have been restated to reflect the adoption of the FASB
Emerging Issues Task Force conclusion on "Accounting for Shipping and Handling
Revenues and Costs" (EITF Issue No. 00-10), which resulted in the
reclassification of Featherlite's delivery charges into Cost of sales rather
than Selling and administrative expense. The restatement had no effect on
Income from operations or Net income.
Featherlite, Inc.
Condensed Balance Sheets
(In thousands)
(Unaudited)
Dec. 31, 2000 Dec. 31, 1999
ASSETS
Current assets
Cash $331 $248
Receivables 6,356 8,915
Inventories 88,391 74,632
Prepaid expenses 2,219 1,547
Deferred taxes 2,381 1,159
Total current assets 99,678 86,501
Property and equipment, net 19,958 19,880
Goodwill -- 8,955
Aircraft held for resale and other assets 4,323 4,448
Total assets $123,959 $119,784
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $2,031 $1,770
Other notes payable 30,215 22,919
Accounts payable 10,121 10,129
Motorcoach shell payables 15,833 8,535
Accrued liabilities 8,431 6,405
Customer deposits 3,078 4,678
Total current liabilities 69,709 54,436
Long-term debt, net of current maturities 29,641 30,563
Other long term liabilities 597 1,059
Shareholders' equity 24,012 33,726
Total liabilities and
shareholders' equity $123,959 $119,784
