Featherlite Announces 2002 Earnings
CRESCO, Iowa--March 13, 2003--Featherlite, Inc. , a leading manufacturer and marketer of specialty aluminum trailers, transporters and luxury motorcoaches, today reported net earnings of $2.7 million, or 38 cents per diluted share, on sales of $193.2 million for the year ended December 31, 2002. This compares with losses of $8.8 million, or $1.35 per diluted share, on sales of $212.8 million for 2001."We are pleased that the Company is seeing positive results from its strategic initiatives," Conrad Clement, Featherlite President and CEO, said. "In 2002 Featherlite posted significant improvements in profitability over both 2000 and 2001 despite the difficult economy in the last half of this year."
Clement credited the improved 2002 earnings to improved margins on trailers and motorcoach sales, manufacturing efficiencies, reduced selling and administrative costs, lower interest expenses and a reduction in restructuring charges attributed to the 2001 closing of the Vogue coach facility in Pryor, Oklahoma.
For the fourth quarter ended December 31, 2002, the Company reported a net loss of $183,000, or 2 cents per diluted share, on sales of $44.3 million. This compares with a net loss of $4.9 million or 75 cents per diluted share on sales of $39.1 million in the fourth quarter last year. Overall sales increased by $5.2 million or 13.3% over the same period last year. Gross profit margins in the quarter increased to 10.2% from 5.6% in the same period in 2001. Total sales and administrative expenses declined in the quarter by $301,000 or 6 percent.
Featherlite's consolidated revenue for all of 2002 declined by 9.2% with coach revenue down 18.5%. This is due in large part to the loss of revenues from the discontinued Vogue coach line whose facility was closed in 2001. If the Vogue 2001 sales are excluded for purposes of comparison with 2002, consolidated revenue for 2002 would have remained essentially unchanged and motorcoach segment sales would have declined by only one percent. Clement believes that the lack of improvement in net sales is due to a still stationary economy and consumer uncertainty.
"We believe Featherlite has gained market share in 2002 in nearly all segments it serves, including luxury motorcoaches, horse and livestock trailers, and other specialty trailers," Clement said.
Overall gross profit margins in 2002 improved to 13.4 percent of sales compared to 8.5% for the same period in 2001. Selling and administrative expenses declined in 2002 by $1.6 million or 7.4 percent. As a percentage of sales these expenses increased by 0.3% compared with 2001.
"Even though the economy has yet to marshal the recovery that will come with improved consumer confidence," Conrad Clement said, "we are pleased with the Company's accelerating efficiencies, better margins and lowered SGA expenses, all of which we expect to contribute to our financial performance as the economy emerges," Clement concluded.
Despite its improved performance, the Company was not in compliance with certain financial covenants in its U.S. Bank facility and in its Deutsche Financial Services facility at December 31, 2002 and through February 28, 2003. The Company is working with these lenders to obtain waivers of these violations, and expects they will be granted.
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, Champ Car, Indy Race League (IRL), SPORTSCAR, 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 report, and in the Company's Form 10-K and other filings with the SEC, are forward-looking in nature and relate to trends and events that may affect the Company's future financial position and operating results. The words "believe," "estimate," "expect," "intend," "may," "could," "will," "plan," "anticipate," and similar words and expressions are intended to identify forward-looking statements. These statements speak only as of the date of this report, are based on current expectations, are inherently uncertain, are subject to risks, and should be viewed with caution. Actual results and experience may differ materially from the forward-looking statements as a result of many factors, including but not limited to: our ability to receive waivers of financial covenant violations as necessary, product demand and acceptance of products in each segment of the Company's markets, fluctuations in the price of aluminum, competition, facilities utilization, the availability of additional capital as may be required to finance any future net liquidity deficiency, and certain other unanticipated events and conditions. It is not possible to foresee or identify all such factors. The Company makes no commitment to update any forward-looking statement or to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward-looking statement, other than as required by law.
Featherlite, Inc.
Condensed Statements of Income
(Unaudited)
(In Thousands, except for per share data)
3 months Ended 12 months Ended
December 31, December 31,
---------------- ------------------
2002 2001 2002 2001
------- ------- -------- --------
Net Sales $44,336 $39,127 $193,166 $212,786
Cost of
Sales 39,816 36,942 167,288 194,754
------- ------- -------- --------
Gross profit 4,520 2,185 25,878 18,032
Selling and administrative
expenses 4,584 4,885 20,287 21,910
Restructure charge 400 422 400 1,572
------- ------- -------- --------
Income (loss) from operations (464) (3,122) 5,191 (5,450)
Other income (expense)
Interest (751) (957) (3,032) (4,300)
Other, net 62 (718) 278 (337)
------- ------- -------- --------
Total Other expense (689) (1,675) (2,754) (4,637)
------- ------- -------- --------
Income (loss) before taxes (1,153) (4,797) 2,437 (10,087)
Provision (benefit) for income
taxes (970) 83 (258) (1,240)
------- ------- -------- --------
Net income (loss) $ (183) $(4,880) $ 2,695 $ (8,847)
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Net income per share-
Basic $ (0.03) $ (0.75) $ 0.41 $ (1.35)
------- ------- -------- --------
Diluted $ (0.02) $ (0.75) $ 0.38 $ (1.35)
------- ------- -------- --------
Weighted average shares
outstanding -
Basic 6,535 6,535 6,535 6,535
------- ------- -------- --------
Diluted 7,207 6,535 7,158 6,535
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Featherlite, Inc.
Condensed Balance Sheets
(Unaudited)
(In thousands)
Dec. 31, Dec. 31,
ASSETS 2002 2001
-------- --------
Current assets
Cash $ 218 $ 247
Receivables 6,117 5,001
Refundable income taxes 1,129 2,755
Inventories 61,459 66,215
Prepaid expenses 2,010 1,977
-------- --------
Total current assets 70,933 76,195
Property and equipment, net 16,697 17,024
Other assets 4,641 3,952
-------- --------
$ 92,271 $ 97,171
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Wholesale financing and other notes payable $ 25,963 $ 27,713
Current maturities of long-term debt 7,886 9,299
Bank line of credit 6,799 7,226
Subordinated convertible debt 1,500 -
Checks issued not yet presented 1,408 3,061
Accounts payable 3,423 5,902
Motorcoach shell costs payable 5,655 7,531
Current portion trade creditor repayment plan 2,515 3,253
Accrued liabilities 8,375 8,365
Customer deposits 1,317 2,204
-------- --------
Total current liabilities 64,841 74,554
Long-term debt, net of current maturities 7,230 3,146
Trade creditor plan, net of current portion 2,170 4,240
Other long-term liabilities 75 90
Shareholders' equity 17,955 15,141
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$ 92,271 $ 97,171
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