Featherlite's Second-Quarter Profits Grow to $1 Million
CRESCO, Iowa--Aug. 6, 2002--Featherlite, Inc. , a leading manufacturer and marketer of specialty aluminum trailers and luxury motorcoaches, today reported profits of $1.0 million, or 14 cents per diluted share, in the second quarter of 2002, which ended June 30th. This compares with a net loss of $4.1 million, or a loss of 63 cents per diluted share in the second quarter last year. Featherlite's profitability has remained strong in 2002 though second quarter sales of $47.6 million were down from $57.4 in the same quarter in 2001, primarily due to discontinuing production in the second quarter last year of Vogue coaches in Pryor, Oklahoma."We are pleased with Featherlite's results in the second quarter of 2002," Conrad Clement, chairman and chief executive officer, said. "With our improved gross profit margins and reduced selling and administrative costs, Featherlite is moving ahead under its strategic plan to improve profitability and shareholder value. Though gross sales in the second quarter were down, our sales levels and net income are in line with Company expectations."
Trailer sales increased by 6.0% in the second quarter of 2002 compared to the same period last year. Motorcoach sales declined by 38.0%, with both new and preowned coach revenues off from 2001.
Gross margins increased by $5.3 million to $7.7 million in the second quarter of 2002, up from $2.4 million in 2001. As a percentage of sales, gross profit margin for the quarter was 16.1% compared to 4.2% in the previous year. The prior year percentage was reduced by 5.1 percentage points due to $2.9 million in restructuring charges included in the cost of sales in 2001, which were related to the closing of the Pryor, Okla. facility. The current quarter reflects improved gross margins from 2002 sales in both the trailer and motorcoach divisions.
Selling and administrative expenses decreased in 2002 by $334,000 or 5.7%, primarily as a result of consolidating motorcoach operations. Motorcoach expenses were down 27%.
Profits up in first six months
Featherlite net income for the six-month period ending June 30, 2002, was $2.1 million or 30 cents per diluted share. This compares with a loss of $4.1 million, or a loss of 62 cents per share in 2001.
The improvement in profitability reflects a non-recurring $4.1 million in restructuring charges in 2001 from closure of the Pryor, Okla. motorcoach facilities, as well as improved margins in 2002 in both divisions.
"Featherlite's financial performance in the first half of 2002 is substantially on track with our projections," Clement said. "Our debt levels--and our interest expense--continue to decline. This combined with our improved efficiencies and SGA due to our consolidation initiatives are all contributing to the positive results.
"We believe Featherlite is gaining market share, and we expect sales, gross margin and bottom line performance to improve as the economic recovery continues," Clement said.
Long-term financing renewed with existing lenders
Featherlite announced Aug. 1 that long-term financing has been renewed and amended with its existing lenders, including a three-year agreement with U.S. Bank National Association (U.S. Bank), formerly Firstar, and a two-year agreement with Deutsche Financial Services Corporation (Deutsche).
Featherlite signed an Amended and Restated Loan Agreement in the aggregate amount of $23.2 million with U.S. Bank including $14 million as an asset based revolving credit commitment, $7.2 million as a term loan for existing real estate and equipment and the remaining $2 million as a term loan for new equipment purchases.
The Deutsche agreement is a $25 million floor plan line for new and preowned motorcoaches held by the Company in inventory.
About Featherlite
Featherlite, Inc., is an innovative 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, mobile marketing trailers and luxury motorcoaches.
Featherlite(R) is the "Official Trailer" of NASCAR, Championship Auto Racing Teams (CART), Indy Race League (IRL), SPORTSCAR, Automobile Racing Club of America (ARCA), World of Outlaws (W.O.O.) and the National Hot Rod Association (NHRA). Featherlite also is sponsor of many equine and livestock events and its products are displayed in over 1,000 fairs, trade shows, races and other events throughout North America each year.
Through its Featherlite Vantare'(R) product line, Featherlite is the "Official Luxury Motorcoach" of NASCAR, IRL, SPORTSCAR and NHRA. For more information about the Company, please visit Featherlite's website at www.fthr.com.
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 Statements of Income
(Unaudited)
(In Thousands, except for per share data)
Three months Ended Six months Ended
June 30 June 30
----------------- ------------------
2002 2001 2002 2001
-------- ------- -------- --------
Net Sales $ 47,624 $ 57,412 $ 108,229 $ 122,093
Cost of Sales 39,953 52,069 92,704 109,725
Restructure charge 0 2,950 0 2,950
-------- ------- -------- --------
Gross profit 7,671 2,393 15,525 9,418
Selling and admininistrative
expenses 5,476 5,810 10,786 11,618
Restructure charge 0 1,150 0 1,150
-------- ------- -------- --------
Income (loss) from
operations 2,195 (4,567) 4,739 (3,350)
Other income (expense)
Interest (782) (1,129) (1,593) (2,461)
Other, net 210 155 225 380
-------- ------- -------- --------
Total Other expense (572) (974) (1,368) (2,081)
-------- ------- -------- --------
Income before taxes 1,623 (5,541) 3,371 (5,431)
Provision (benefit) for income
taxes 600 (1,403) 1,247 (1,358)
-------- ------- -------- --------
Net income (loss) $ 1,023 $ (4,138) $ 2,124 $ (4,073)
======== ======= ======== ========
Net income per share-
Basic $ 0.16 $ (0.63) $ 0.33 $ (0.62)
-------- ------- -------- --------
Diluted $ 0.14 $ (0.63) $ 0.30 $ (0.62)
-------- ------- -------- --------
Weighted average shares
outstanding -
Basic 6,535 6,535 6,535 6,535
-------- ------- -------- --------
Diluted 7,112 6,535 6,995 6,535
-------- ------- -------- --------
Featherlite, Inc.
Condensed Balance Sheets
(Unaudited)
(In thousands)
June 30, Dec. 31,
ASSETS 2002 2001
------- -------
Current assets
Cash $ 271 $ 247
Receivables 7,104 5,001
Refundable income taxes -- 2,755
Inventories 57,575 66,215
Prepaid expenses 1,676 1,977
------- -------
Total current assets 66,626 76,195
Property and equipment, net 16,338 17,024
Other assets 4,270 3,952
------- -------
$ 87,234 $97,171
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LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities
Current maturities of long-term debt $ 8,472 $ 9,299
Bank line of credit 6,324 7,226
Checks issued not yet presented 3,684 3,061
Wholesale financing and other notes payable 21,046 27,713
Subordinated convertible debt 1,448 --
Motorcoach shell costs payable 6,068 7,531
Accounts payable 2,912 5,902
Trade creditor repayment plan 2,966 3,253
Accrued liabilities 9,570 8,365
Customer deposits 760 2,204
------- -------
Total current liabilities 63,250 74,554
------- -------
Long-term debt, net of current maturities 6,517 7,386
Other long-term liabilities 83 90
Shareholders' equity 17,384 15,141
------- -------
$ 87,234 $97,171
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