Featherlite Reports Third-Quarter Profits; Net Income Improvement Reflects Reduced Operating Expenses
CRESCO, Iowa--Nov. 1, 2001--Featherlite, Inc. , a leading manufacturer and marketer of specialty aluminum trailers and luxury motorcoaches, today reported net sales for the third quarter ended September 30, 2001 of $51.6 million. This is up 0.4% from net sales of $51.3 million last year. Net profit for the third quarter was $106,000, or 1 cent per diluted share, as compared to a net loss of $637,000, or 10 cents per diluted share last year.The Company's improvement of over $743,000 in net income is substantially the result of reduced selling and administrative expenses, including research and development costs, compared to last year. The reductions are related to the closing of the Featherlite plant in Pryor, Okla., at the end of the second quarter in 2001, as well as the Company's across the board focus on cost control and reduction of direct and indirect expenses.
"The positive effects of our strategic restructuring were evident in Featherlite's third quarter results," Conrad Clement, Featherlite chairman and chief executive officer, said. "Though we are cautious on sales growth in the near term, particularly since the events of Sept. 11, we believe that our aggressive sales posture coupled with our successes in enhanced efficiencies have well positioned the Company to capitalize on an improving economy."
Featherlite's overall sales reflected a 22.2% increase in coach sales over last year, while overall trailer sales declined 14.8 percent. "We believe Featherlite is gaining market share in the bus conversion segment of the RV industry," Clement said. As a percentage of sales, gross profit for the quarter declined slightly to 12.5% compared to 13.0 % in 2000. Trailer margins improved over 2000 due to reduced raw material costs and improved labor and overhead utilization during the quarter. Motorcoach gross profit margins declined due to reductions in new inventory at lower than average selling prices.
Selling and administrative expenses declined in the third quarter of 2001 by $1.2 million, an 18% reduction from the same period in 2000. As a percentage of sales, these expenses decreased to 10.5% in 2001 from 12.8% in 2000. Featherlite's income before taxes increased by almost $1.2 million to $141,000 in the third quarter of 2001, compared to a loss before taxes of $1.0 million in the same quarter last year.
For the nine months ended Sept. 30, 2001, net sales were $173.7 million, down 6.8% from sales of $186.4 million in last year's comparable period. Net loss for the nine months was $4.0 million, or 61 cents per diluted share. This compares with net income of $1.2 million in 2000 or 17 cents per diluted share.
Safe Harbor Statement under the Private Securities Litigation Reform Act: Certain statements in this release are forward-looking, including those that reflect our current views of future events and financial performance, involve known and unknown risks and uncertainties that could cause actual results or facts to be materially different. Some of these risks include, but are not limited to, product acceptance and demand in each segment of our markets, the price of aluminum, competition, facilities utilization, and other risks described from time to time in our reports to the Securities and Exchange Commission. Investors should take such risks into account when making investment decisions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Featherlite undertakes no obligation to update publicly or revise any forward-looking statements.
About Featherlite
Featherlite, Inc., is a national leader in designing, manufacturing and marketing high quality aluminum specialty trailers, transporters and luxury motorcoaches. With more that 75 percent of its business in the leisure, recreation and entertainment categories, Featherlite has highly diversified product lines offering hundreds of standard model and custom-designed aluminum specialty trailers, specialized transporters and luxury 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), World of Outlaws (W.O.O.) and the National Hot Rod Association (NHRA). Through its Featherlite Vantare product line, Featherlite is the "Official Luxury Motorcoach" of NASCAR, IRL, SPORTSCAR, CART and NHRA. For more information about the Company, please visit Featherlite's website at http://www.featherliteinc.com.
Featherlite, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except for per share data)
Three Months Ended Nine months Ended
September 30, September 30,
------------- -------------
2001 2000 2001 2000
---- ---- ---- ----
Net sales $51,566 $51,347 $173,659 $186,412
Cost of sales 45,137 44,690 157,812 160,779
------- ------- -------- --------
Gross profit 6,429 6,657 15,847 25,633
Selling and administrative
expenses 5,407 6,565 17,025 20,901
Restructure charge -- -- 1,150 --
------- ------- -------- --------
Income (loss) from operations 1,022 92 (2,328) 4,732
Other income (expense)
Interest (882) (1,233) (3,342) (3,548)
Other, net 1 93 380 702
------- ------- -------- --------
Total other expense (881) (1,140) (2,962) (2,846)
------- ------- -------- --------
Income (loss) before income
taxes 141 (1,048) (5,290) 1,886
Provision for (benefit from)
income taxes 35 (411) (1,323) 734
------- ------- -------- --------
Net income (loss) $106 $(637) $(3,967) $1,152
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Net income (loss) per share -
basic and diluted $0.01 $(0.10) $(.61) $.17
======= ------- -------- --------
Average common shares
outstanding - basic and diluted 6,535 6,535 6,535 6,535
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Featherlite, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
Sept. 30, Dec. 31,
ASSETS 2001 2000
--------- ---------
Current assets
Cash $149 $331
Receivables 6,329 6,356
Inventories 66,603 88,391
Prepaid expenses 2,414 2,219
Deferred taxes 2,395 2,381
-------- --------
Total current assets 77,890 99,678
-------- --------
Property and equipment, net 17,650 19,958
Other assets 4,510 4,323
-------- --------
$100,050 $123,959
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $21,068 $2,031
Wholesale financing and other notes payable 26,932 30,215
Motorcoach shell costs payable 7,159 15,833
Accounts payable 12,292 10,121
Accrued liabilities 7,287 8,431
Customer deposits 1,582 3,078
-------- --------
Total current liabilities 76,320 69,709
Long-term debt, net of current maturities 3,142 29,641
Other long term liabilities 586 597
Shareholders' equity 20,002 24,012
-------- --------
$100,050 $123,959
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