Featherlite Announces Year-End Results
CRESCO, Iowa--March 13, 2002--Featherlite, Inc. today reported net losses of $4.9 million, or 75 cents per diluted share, on sales of $39.1 million for the fourth quarter ended December 31, 2001. This compares with losses of $11.0 million, or $1.69 per diluted share, in the fourth quarter of 2000, which included an $8.8 million asset impairment charge. Revenues in the 4th quarter of $39.1 million were down 30.1% from net sales of $56.1 million in the same quarter last year.
"The tragic events of September 11 unfortunately had a profoundly chilling effect on Featherlite 4th quarter results, as we believe it did for many American manufacturers," Featherlite President and CEO Conrad Clement noted. "After gaining solid sales momentum and posting turnaround profits in the 3rd quarter ending September 30, Featherlite experienced a sharp drop-off in sales as consumer confidence and the economy tumbled in the last quarter of the year following the acts of terror in New York and Washington. As a result of these significant changes in economic conditions, the Company recorded $2.5 million in write-downs of motorcoach inventory during the quarter to facilitate the sale of non-current new and used motorcoaches.
"However, we are again experiencing positive signs in the initial stages of 2002. Our trailer backlog is increasing significantly and coach sales are very active. With our encouraging start in 2002 and aggressive measures in place to promote sales, we are hopeful that sales will continue to increase as national business conditions improve," Clement said.
The drop in Featherlite 4th quarter sales adversely impacted the Company's overall liquidity and operating results for the year. Featherlite moved aggressively in the quarter to deal with reduced cash flow, including reducing management salaries, freezing wage increases, and taking other steps necessary to reduce cost. Fourth quarter sales price reductions and sales promotions were implemented for the motorcoach inventory. Sales promotions also were launched in the trailer division, to stimulate sales and improve cash flow. As previously announced, Featherlite is pursuing strategic financing alternatives through an investment banking firm, including obtaining additional long-term capital to finance the entire company or the possible sale of the motorcoach division.
Featherlite has received proposals from two of its existing lenders to continue the established credit facilities in 2002 and beyond. The Company expects these proposals to be finalized and closed by April 30, 2002. These arrangements, if finalized, would allow Featherlite to continue operations with its current trailer and motorcoach divisions. Featherlite has infused additional capital of $4.2 million, which includes $1.5 million in subordinated debt and an income tax refund of $2.7 million received in 2002.
For the year ended December 31, 2001, the Company reported a net loss of $8.8 million, or $1.35 per diluted share, on sales of $212.8 million. This compares with a loss of $9.9 million, or $1.51 per diluted share, in 2000 on sales of $242.5 million. Losses in 2001 include restructuring charges of $4.5 million related to the August closing of the Vogue motorcoach facility in Pryor, Okla. Losses in 2000 included an asset impairment charge of $8.8 million.
Cost containment initiatives implemented throughout the year lowered sales and administrative expenses by 20% or $5.3 million. Sales and administrative expenses decreased to 10.3% of sales, improving from 11.2% of sales in 2000. "As we go forward, we will continue to sustain lower sales and administrative expenses relative to revenues, improve our efficiencies, and maintain an aggressive sales and marketing posture." Clement noted.
"Featherlite continues to be a dominant brand and market leader in both the specialty trailer and motorcoach segment. Despite the adverse times, we believe we have gained market share in both of these segments. We are hopeful that the changes we have implemented in 2001, together with an improved economy, will enable Featherlite to regain profitability and improve shareholder value," he concluded.
About Featherlite
Featherlite, Inc., is a North American leader in designing, manufacturing and marketing high quality aluminum specialty trailers, transporters and luxury motorcoaches. Featherlite has highly diversified product lines offering hundreds of standard model and custom-designed trailers. Featherlite's high-quality dealer network in the U.S. and Canada is the most extensive in the trailer industry. The nation's dominant trailer brand, Featherlite is the "Official Trailer" of NASCAR, Championship Auto Racing Teams (CART), Indy Race League (IRL), Automobile Racing Club of America (ARCA ReMax Series), American Speed Association (ASA), World of Outlaws (W.O.O.) and the National Hot Rod Association (NHRA). Featherlite is the "Official Luxury Motorcoach" of NASCAR, IRL, and NHRA. The company is also sponsor of numerous equine and livestock organizations, including the Ohio All American Quarter Horse Congress, the National Western Livestock Show, the National High School Rodeo Association and the World's Toughest Rodeo.
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.
Featherlite, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except for per share data)
Three Months Ended Year Ended
December 31, December 31,
------------- -------------
2001 2000 2001 2000
---- ---- ---- ----
Net sales $39,127 $56,074 $212,786 $242,486
Cost of sales 36,942 52,035 194,754 212,813
------- ------- -------- --------
Gross profit 2,185 4,039 18,032 29,673
Selling and administrative
expenses 4,885 6,333 21,910 27,235
Asset impairment charge -- 8,781 -- 8,781
Restructure charge 422 -- 1,572 --
------- ------- -------- --------
Loss from operations (3,122) (11,075) (5,450) (6,343)
Other income (expense)
Interest (957) (1,448) (4,300) (4,996)
Other, net (718) 45 (337) 747
------- ------- -------- --------
Total other expense (1,675) (1,403) (4,637) (4,249)
------- ------- -------- --------
Loss before income taxes (4,797) (12,478) (10,087) (10,592)
Provision for (benefit from)
income taxes 83 (1,462) (1,240) (728)
------- ------- -------- --------
Net loss $(4,880)$(11,016) $(8,847) $ (9,864)
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Net loss per share -
basic and diluted $ (0.75) $(1.69) $(1.35) $(1.51)
======= ======= ======= =======
Average common shares
outstanding - basic and diluted 6,535 6,535 6,535 6,535
------- ------- -------- --------
Featherlite, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
Dec. 31, Dec. 31,
ASSETS 2001 2000
--------- ---------
Current assets
Cash $247 $331
Receivables 5,001 6,356
Refundable income taxes 2,755 --
Inventories 66,215 88,391
Prepaid expenses 1,977 2,219
Deferred taxes -- 2,381
-------- --------
Total current assets 76,195 99,678
-------- --------
Property and equipment, net 17,024 19,958
Other assets 3,952 4,323
-------- --------
$ 97,171 $123,959
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 9,299 $2,031
Bank line of credit 7,226 12,880
Checks issued but not yet presented 3,061 4,940
Wholesale financing and other notes payable 27,713 30,215
Motorcoach shell costs payable 7,531 15,833
Trade accounts payable 5,902 10,121
Trade creditors repayment plan 3,253 --
Accrued liabilities 8,365 8,431
Customer deposits 2,204 3,078
-------- --------
Total current liabilities 74,554 87,529
-------- --------
Long-term debt, net of current maturities
Trade creditors repayment plan 4,240 --
Other debt 3,146 11,821
-------- --------
Total long-term debt 7,386 11,821
-------- --------
Other long term liabilities 90 597
Shareholders' equity 15,141 24,012
-------- --------
$ 97,171 $123,959
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