Featherlite Reports Second-Quarter Sales Increase of 54 Percent Net Income Rises To 10 Cents Per Share Vs. 0 Cents Last Year
29 July 1997
Featherlite Reports Second-Quarter Sales Increase of 54 Percent Net Income Rises To 10 Cents Per Share Vs. 0 Cents Last Year
CRESCO, Iowa, July 29 -- Featherlite Mfg., Inc.
, a leading manufacturer and marketer of specialty aluminum
trailers and luxury motorcoaches, today reported net income of $614,000, or 10
cents per share, for the second quarter ended June 30, 1997, compared with net
income of $14,000, or 0 cents per share, for the second quarter of last year.
Net sales for the second quarter were $32,652,000, compared with net sales of
$21,169,000 last year. The second quarter sales increase of 54.2 percent over
last year includes a 23.5 percent rise in Featherlite's specialty trailer
business and the addition of luxury motorcoach sales from Vantare, which was
acquired by Featherlite in the third quarter of 1996.
Conrad Clement, chairman and chief executive officer, said, "We are very
pleased with our continued strong improvement in net income in the second
quarter. Sustained growth in our trailer business, improved gross margin and
a reduction in the operating expense ratio resulted in significantly improved
operating margin in the quarter. Operating income, at $1.4 million, was
$1.3 million higher than last year.
"In the first six months of this year our net income has already surpassed
each of the last two fiscal years. The results we have achieved are
consistent with our plans and in line with our expectations for a very good
year for Featherlite."
The second-quarter sales increase of 54.2 percent to $32.7 million included
sales of $6.2 million from Featherlite's Vantare luxury motorcoach division.
Sales of specialty trailers grew by 23.5 percent led by strong gains in the
company's recreational and leisure product categories. Sales of car/race car
trailers and transporters doubled from last year's second quarter and utility
and recreational trailer sales increased 135 percent. Sales of livestock
trailers increased 33 percent in the quarter.
Gross profit margin in the second quarter was 15.9 percent, compared with
12.8 percent in the second quarter of last year. The improvement from last
year reflects lower aluminum costs and increased labor efficiency, offset in
part by lower margin in the sale of used and certain new motorcoaches by
Vantare which was not reflected in last year's results. Gross profit margin
in the current quarter was also held back, as anticipated, by development
costs related to the production of the innovative slide-out model luxury
motorcoach being produced by Vantare. Featherlite believes all significant
development costs now have been incurred and should not hold back Vantare's
contribution to operating income in future quarters. In last year's second
quarter, gross profit margin was negatively affected by inventory adjustments
and, to some extent, higher labor costs related to the start-up and
development of drop-frame furniture moving vans.
Selling and administrative expenses were 11.7 percent of sales in the
quarter, an improvement over 12.3 percent of sales in the second quarter of
last year.
For the six months ended June 30, 1997, net income was $1,371,000, or 22
cents per share, compared with net income of $65,000, or 1 cent per share, for
last year's comparable six-month period. Net sales for this year's six-month
period were $66,686,000, up 62.1 percent from net sales of $41,144,000 last
year. The strong sales increase in the six-month period resulted from an 18.5
percent increase in Featherlite's specialty trailer business and the addition
of $17 million in sales from Vantare, which was not included in last years'
six-month sales total.
Featherlite's sales backlog on June 30, 1997, was $32.2 million, up
significantly from the $11.0 backlog on June 30, 1996. Vantare accounts for
$17.4 million of the current year's backlog, with $5.6 million of the Vantare
backlog scheduled for 1998 delivery.
"We continue to benefit from the enormous market for aluminum specialty
trailer and transporters for the entertainment industry and leisure
activities, and the strength of the Featherlite brand name in serving those
markets," Clement said. "With our added Vantare luxury motorcoach product
line, we are further positioning Featherlite for expanded marketing and
cross-selling opportunities among customers who already know and trust the
Featherlite brand. Our planned acquisition of Camp & Associates is a further
tangible expression of our strong belief in the opportunities that exist for
Featherlite in the rapidly growing leisure and entertainment categories,
particularly motorsports and other areas of sports marketing. We expect this
transaction to be completed within the next month."
Featherlite announced in June its execution of a letter of intent to
acquire the assets of Camp & Associates, Concord, N.C., a marketing company
which handles sports management for some of the top National Association of
Stock Car Auto Racing (NASCAR) Winston Cup teams, drivers and sponsors. The
acquisition is subject to due diligence and the completion of a definitive
agreement.
"Our entry into sports marketing through the acquisition of Camp &
Associates and the creation of the Featherlite Sports Group will further
diversify our business, and will position us to capitalize on the existing
strong relationships between Featherlite and leading figures and organizations
in the motorsports industry," Clement said.
About Featherlite
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) and World of Outlaws
(W.O.O.). Vantare, Featherlite's luxury motorcoach division, is the "Official
Coach" of NASCAR, IRL and SPORTSCAR.
Featherlite designs, manufactures and markets high-quality specialty
trailers, including horse, livestock, utility and cargo drop frame vans,
luxury motor coaches, snowmobile and car trailer, and race car transports.
The company offers diversified product lines with more than 400 custom-order
and standard-model specialty trailers through a network of more than 240
full-line and over 600 limited-line dealers in the United States and Canada.
For more information, please visit the Featherlite website at
http://www.featherlitemfg.com/.
Featherlite Mfg., Inc.
Condensed Statements of Income (In thousands, except per share data)
(unaudited)
Three Months Ended Six Months ended
June 30, June 30,
1997 1996 1997 1996
Net sales $ 32,652 $ 21,169 $ 66,686 $ 41,144
Cost of sales 27,451 18,465 56,390 35,422
Gross profit 5,201 2,704 10,296 5,722
Selling and
administrative expenses 3,817 2,619 7,416 5,335
Income from operations 1,384 85 2,880 387
Other income (expense)
Interest (440) (326) (776) (657)
Grant and other income,
net 78 263 180 375
Total other income,
net (362) (63) (596) (282)
Income before taxes 1,022 22 2,284 105
Provision for income
taxes 408 8 913 40
Net income $ 614 $ 14 $ 1,371 $ 65
Net income per share $ 0.10 $ -- $ 0.22 $ 0.01
Weighted average shares
outstanding 6,326 5,955 6,311 5,955
Featherlite Mfg., Inc.
Condensed Balance Sheets (In thousands)
June 30, 1997 Dec. 31, 1996
(unaudited)
ASSETS
Current assets
Cash $ 856 $ 256
Trade receivables 8,316 6,783
Inventories 27,465 25,235
Prepaid expenses 1,033 1,094
Deferred taxes 481 481
Total current assets 38,151 33,849
Property and equipment 19,829 17,687
Less accumulated depreciation (5,705) (4,914)
Property and equipment, net 14,124 12,773
Goodwill and other assets 9,737 6,912
Total assets $ 62,012 $ 53,534
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of
long-term debt $ 1,372 $ 1,146
Other notes payable 2,710 2,255
Accounts payable 11,077 9,776
Accrued liabilities 3,928 3,110
Customer deposits 1,728 2,157
Income taxes payable 223 240
Total current liabilities 21,038 18,684
Long-term debt, net of current
maturities 18,136 13,346
Deferred grant income 274 310
Deferred taxes 599 599
Shareholders equity 21,965 20,595
Total liabilities and
shareholders' equity $ 62,012 $ 53,534
Safe Harbor Statement under the Private Securities Litigation Reform Act:
Statements in this release looking forward in time involve risks and
uncertainties discussed here and in the company filings with the Securities
and Exchange Commission, including product acceptance and demand in each
segment of the Company's markets, the price of aluminum, competition, and
facilities utilization.
SOURCE Featherlite Mfg., Inc.