Featherlite Reports Q3 Results
29 October 1997
Featherlite Reports Record Third-Quarter Results Net Income Rises to 14 Cents Per Share Vs. 3 Cents Last Year
Operating Income More Than Doubles on 15-Percent Gain in Net Sales
CRESCO, Iowa, Oct. 29, 1997 -- Featherlite Mfg., Inc. , a
leading manufacturer and marketer of specialty aluminum trailers and luxury
motorcoaches, today reported net income of $889,000, or 14 cents per share,
for the third quarter ended Sept. 30, 1997, compared with net income of
$206,000, or 3 cents per share, for the third quarter of last year. Net sales
for the third quarter were $32,728,000, up 15.3 percent from net sales of
$28,384,000 last year.
"Featherlite's strong performance set new third-quarter records for both
sales and net income," said Conrad Clement, chairman and chief executive
officer. "Our strategic focus on the motorsports and other leisure and
entertainment categories continued to produce strong results. Sales of
car/race car and specialty transporters, for example, were up by more than 60
percent over last year's third quarter. We are particularly pleased with the
strong gain in operating income which was $1,587,000, or 4.8 percent of net
sales, up significantly from $690,000, or 2.4 percent of net sales last year."
Gross profit margin in the third quarter was 17.7 percent, compared with
13.9 percent in the third quarter of last year. The gross profit margin
increase reflects lower raw material costs, primarily due to changes in
Featherlite's product mix, and increased labor efficiencies. The improvement
was offset in part by the lower margin of used and certain new motorcoaches
sold through Featherlite's Vantare motorcoach division. Selling and
administrative expenses were 12.9 percent of sales in the quarter, up from
11.4 percent last year. The increase was attributable to additional marketing
expenses, primarily in the Vantare division.
For the nine months ended Sept. 30, 1997, net income was $2,259,000, or 36
cents per share, compared with net income of $271,000, or 4 cent per share, in
last year's comparable nine-month period. Net sales for this year's nine-month
period were $99,414,000, up 43.0 percent from net sales of $69,528,000 last
year. The strong sales increase in the nine-month period resulted from an
18.6 percent increase in Featherlite's specialty trailer business and the
addition of $25.8 million in sales from Vantare, which was acquired during the
third quarter of last year and was not included in Featherlite's results for
the first six months of 1996.
Featherlite's sales backlog on Sept. 30, 1997, was $33 million, which
includes a $10 million sales backlog in Vantare luxury motorcoaches scheduled
for 1998 delivery.
"In addition to our strong operating results, we also made further
strategic progress during the quarter in capitalizing on Featherlite's strong
presence in the motorsports industry. We have formed the Featherlite/GMR
Sports Group, LLC, which will focus on developing promotional events and
implementing marketing strategies for sponsors, teams and sanctioning bodies
in the rapidly growing motorsports industry," Clement said.
The Featherlite/GMR Sports Group is a joint venture between Featherlite
and GMR Marketing, Brookfield, Wis., a recognized national leader in event,
entertainment and sports marketing.
Looking Forward
"We are very positive about our new motorsports-related strategy and
pleased with the positive impact that our close affiliation with the
motorsports industry has already had on our financial performance," Clement
said. "We expect sales to remain strong through the fourth quarter in most of
our product lines, and we continue to expect a very good year for Featherlite.
"Longer-term, we are very optimistic about our market positioning and
pleased with our significantly changed product mix. With more than 75 percent
of our revenues now in the motorsports, leisure and entertainment categories,
we are strategically well-situated to benefit from the very strong growth in
these rapidly expanding markets. We are equally positive about the growth
opportunities in the special-purpose transporter market as more major
corporations supplement their national marketing programs with specially-
equipped vans that continually tour major entertainment venues throughout the
U.S. We have an established presence in serving this special-purpose
transporter market, highly experienced designers, proven manufacturing
processes and sufficient manufacturing capacity to accommodate the growth that
we believe this market will continue to offer.
"Luxury motorcoaches, produced by Featherlite's Vantare division,
represent another category with solid opportunity for Featherlite. In both
commercial applications and in serving an expanding market of affluent
clientele who expect the very best in pursuing their leisure activities,
Vantare motorcoaches are recognized for quality and innovation," Clement said.
"We are excited about our multiple avenues for growth. And we are
encouraged by the many opportunities that we see as a result of the product
diversification and strategic repositioning which Featherlite has accomplished
over the past two years."
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 Web site at
http://www.featherlitemfg.com
Featherlite Mfg., Inc.
Condensed Statements of Income (In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months ended
Sept. 30, Sept. 30,
1997 1996 1997 1996
Net sales $32,728 $28,384 $99,414 $69,528
Cost of sales 26,926 24,446 83,315 59,869
Gross profit 5,802 3,938 16,099 9,659
Selling and administrative
expenses 4,215 3,248 11,632 8,582
Income from operations 1,587 690 4,467 1,077
Other income (expense)
Interest (445) (395) (1,220) (1,052)
Gain on aircraft and
other sales 275 -- 269 --
Grant and other income, net 66 44 250 419
Total other income, net (104) (351) (701) (633)
Income before taxes 1,483 339 3,766 444
Provision for income taxes 594 133 1,507 173
Net income $889 $206 $2,259 $271
Net income per share $0.14 $0.03 $0.36 $0.04
Weighted average shares
outstanding 6,305 6,255 6,309 6,055
Featherlite Mfg., Inc.
Condensed Balance Sheets (In thousands)
Sept. 30, 1997 Dec. 31, 1996
(unaudited)
ASSETS
Current assets
Cash $673 $256
Trade receivables 7,947 6,783
Inventories 30,662 25,235
Prepaid expenses 768 1,094
Deferred taxes 481 481
Total current assets 40,531 33,849
Property and equipment 19,619 17,687
Less accumulated depreciation (5,936) (4,914)
Property and equipment, net 13,683 12,773
Goodwill and other assets 6,943 6,912
Total assets $61,157 $53,534
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of
long-term debt $1,073 $1,146
Other notes payable 3,960 2,255
Accounts payable 10,808 9,776
Accrued liabilities 4,704 3,110
Customer deposits 1,898 2,157
Accrued income taxes 410 240
Total current liabilities 22,853 18,684
Long-term debt, net of
current maturities 14,596 13,346
Deferred grant income 255 310
Deferred taxes 599 599
Shareholders equity 22,854 20,595
Total liabilities and
shareholders' equity $61,157 $ 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.