Featherlite Reports Earnings of $1.4 Million in First Quarter; Net Sales for Quarter Up Over 3% to $60.4 Million
CRESCO, Iowa--May 2, 2006--Featherlite, Inc. , a leading manufacturer and marketer of specialty aluminum trailers, transporters and luxury motorcoaches, today reported net income of $1.4 million, or 12 cents per diluted share, on net sales of $60.4 million for the first quarter ended March 31, 2006. First quarter net sales rose by $1.8 million, or 3.1 percent, over the same period last year. Net income of $1.4 million in the first quarter of 2006 compares with $1.5 million, or 13 cents per diluted share, in the same period in 2005, a 6.1 percent decrease. On a consolidated basis, lower first quarter net income was primarily the result of decreased gross margin percentages in the coach segment due to changes in the mix of new and used coach sales, partially offset by decreased operating expenses due to reduced bonus accruals compared to the same period in 2005.Trailer segment sales in the first quarter of 2006 increased 5.5 percent over the same period last year as trailer orders remained strong and price increases and surcharges implemented during the quarter became effective. Luxury coach sales in the first quarter of 2006 were comparable to the same period last year, with used coach sales up significantly and new coach sales down approximately the same amount.
"Both luxury coach and trailer sales leads, one indicator of potential future sales levels, came in at a record pace during the first quarter of 2006," according to President and CEO Conrad Clement. "The Company and the trailer industry continue to experience margin pressure as aluminum and steel commodity prices rise. The Company is managing these fluctuations with appropriate product price increases and surcharges as well as controlling operating expenses, and we remain cautiously optimistic about the level of business during the remainder of 2006.
"Later this week the Company will announce the 2007 Featherlite trailer models at our annual international dealer meeting. The event, which is open to all 220 Featherlite dealers, will showcase the boldest product enhancements ever unveiled at Featherlite. We think this event will continue the escalating interest in Featherlite trailers in all categories.
"As announced on January 9, 2006, we continue to work with our financial advisor, Houlihan Lokey Howard & Zukin, to explore strategic alternatives to enhance shareholder value. We do not intend to disclose developments with respect to our exploration of strategic alternatives unless and until a specific transaction is approved by our board of directors," Clement said.
About Featherlite
With more that 75 percent of its business in the leisure, recreation and entertainment categories, Featherlite(R), Inc. has highly diversified product lines offering hundreds of standard model and custom-designed aluminum specialty trailers, specialized transporters, mobile marketing trailers and luxury motorcoaches. For more information about the Company, please visit www.fthr.com.
Featherlite, Inc.
Condensed Balance Sheets
(Unaudited)
(In thousands)
March 31, Dec 31,
ASSETS 2006 2005
------------ ------------
Current assets
Cash $170 $91
Receivables 8,331 7,178
Refundable income taxes 337 337
Inventories 54,775 55,714
Leased promotional trailers 1,636 1,550
Prepaid expenses 1,412 1,820
Deferred tax asset 1,329 1,329
------------ ------------
Total current assets 67,990 68,019
Property and equipment, net 16,555 16,583
Other assets 3,920 3,199
------------ ------------
$88,465 $87,801
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Wholesale financing and other notes
payable $15,963 $18,923
Current maturities of long-term debt 1,797 1,791
Checks issued not yet presented 3,170 4,419
Accounts payable 4,358 4,384
Motorcoach shell costs payable 6,212 3,142
Accrued liabilities 9,183 8,194
Customer deposits 2,702 2,832
------------ ------------
Total current liabilities 43,385 43,685
Bank line of credit 2,419 2,418
Other long-term debt, net of current
maturities 9,717 10,168
Deferred tax liabilities 1,259 1,259
Other long-term liabilities 32 35
Shareholders' equity 31,653 30,236
------------ ------------
$88,465 $87,801
============ ============
FEATHERLITE, INC
Condensed Statements of Income
(Unaudited)
(In Thousands, except for per share data)
Three months Ended
March 31,
-------------------------
2006 2005
------------ ------------
Net Sales $60,433 $58,587
Cost of Sales 51,156 48,835
------------ ------------
Gross profit 9,277 9,752
Selling and administrative expenses 6,417 6,782
------------ ------------
Income from operations 2,860 2,970
Other income(expense)
Interest (644) (631)
Other, net 34 28
------------ ------------
Total other expense (610) (603)
------------ ------------
Income before taxes 2,250 2,367
Minority interest in subsidiary income - (11)
Provision for income taxes (878) (895)
------------ ------------
Net income $1,372 $1,461
============ ============
Net income per share-
Basic $0.12 $0.13
------------ ------------
Diluted $0.12 $0.13
------------ ------------
Weighted average shares outstanding -
Basic 11,040 10,879
------------ ------------
Diluted 11,680 11,435
------------ ------------
All shares and per share amounts have been restated to reflect the
retroactive effect of the 3 for 2 stock split on May 4, 2005
Certain prior period information has been reclassified to conform to
the presentation in the Company's Annual Report on Form 10-K.