Featherlite Reports Q1 Net Income
29 April 1998
Featherlite First-Quarter Net Income Rises 51 Percent
Income From Operations Up 51 Percent; Net Sales Climb 23 Percent To $41.7
Million
CRESCO, Iowa, April 29 -- Featherlite Mfg., Inc.
, a leading manufacturer and marketer of specialty aluminum
trailers and luxury motorcoaches, today reported net sales for the first
quarter ended March 31, 1998, of $41.7 million, up 22.6 percent from net sales
of $34.0 million in last year's first quarter. Net income for the first
quarter was $1,141,000, or 18 cents per diluted share, up 50.9 percent from
net income of $756,000, or 12 cents per diluted share, in the first quarter of
last year.
Conrad Clement, chairman and chief executive officer, said, "Featherlite's
strong performance set new first quarter records for both sales and net
income. Our strategic focus on the recreation, leisure and entertainment
categories, including motorsports, continued to produce strong results, and
our sales growth was well-balanced across product categories. We are
especially pleased with the strong gain in operating income which was
$2,256,000, or 5.4 percent of net sales, up 50.9 percent from $1,495,000, or
4.4 percent of net sales last year."
Featherlite's first quarter net sales increased $7.7 million over the
first quarter of 1997. The sales growth was led by a 50-percent increase in
sales of utility and recreational trailers. Sales of car trailers and race
car transporters increased by 27 percent over last year, livestock trailer
sales grew 24 percent, and horse trailer sales increased 18 percent. Sales of
commercial and semi trailers increased 9 percent. Sales of luxury
motorcoaches by Featherlite's Vantare division increased by 19 percent over
last year's first quarter.
Gross profit margin in the first quarter was 16.6 percent, compared with
15.0 percent in the first quarter of last year. The gross profit margin
increase reflects improved gross margin in the Vantare luxury motorcoach
division. This was offset in part by moderately lower gross margin in
Featherlite's trailer product categories due to increased labor costs which
were not yet fully offset by price increases that were effective late in the
first quarter. Selling and administrative expenses were 11.2 percent of sales
in the quarter, up from 10.6 percent last year. The increase was attributable
to additional marketing expenses.
"In addition to our strong performance in the first quarter," Clement
said, "we took a further step forward in the implementation of our long-term
business strategy with the signing of a letter of intent to acquire the assets
of the Mitchell Companies, manufacturer and distributor of the high quality
Vogue(R) line of luxury motorcoaches and bus conversion vehicles."
The Mitchell Companies (Mitchell Coach Manufacturing, Inc., and Mitchell
Motorcoach Sales, Inc.) is a privately held company based in Pryor, Okla.
Unaudited net sales for the Mitchell Companies in its most recent fiscal year
were approximately $34 million. The transaction is subject to further due
diligence and other customary conditions and is expected to be completed in
May.
Clement said, "This planned acquisition is an ideal strategic fit for
Featherlite. We will invest several million dollars of additional working
capital in the Mitchell companies and evaluate current pricing and other
operating policies, but expect that this new operation will be accretive to
Featherlite's 1998 and 1999 earnings.
"The Mitchell Companies are highly complementary to our Vantare division,
which is already one of the leading producers of luxury motorcoaches in the
U.S. This acquisition will significantly add to Featherlite's presence in the
luxury motorcoach and recreational vehicle markets, and will double our
business in this fast-growing category, making Featherlite the dominant
manufacturer of bus conversion luxury motorcoaches in the U.S. The
acquisition is further tangible evidence of Featherlite's commitment to growth
in the rapidly expanding leisure and recreation markets."
About Featherlite
Featherlite is an innovative leader in designing, manufacturing and
marketing high quality aluminum specialty trailers, transporters and luxury
motorcoaches. With three-quarters of its business in the leisure, recreation
and entertainment categories, Featherlite has highly diversified product lines
offering standard model aluminum specialty trailers and custom-designed
trailers, transporters and motorcoaches. 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. For more information about the company, please visit Featherlite's
website at http://www.featherlitemfg.com
Featherlite Mfg., Inc.
Condensed Statements of Income
(In thousands, except per share data)
(unaudited)
Three Months Ended March 31,
1998 1997
Net sales $41,742 $34,034
Cost of sales 34,825 28,939
Gross profit 6,917 5,095
Selling and administrative
expenses 4,661 3,600
Income from operations 2,256 1,495
Other income (expense)
Interest (576) (336)
Other, net 221 102
Total other expense (355) (234)
Income before taxes 1,901 1,261
Provision for income taxes 760 505
Net income $1,141 $756
Net income per common and
common equivalent share:
Basic and Diluted $0.18 $0.12
Weighted average shares
outstanding:
Basic 6,255 6,255
Diluted 6,340 6,296
Featherlite Mfg., Inc.
Condensed Balance Sheets
(In thousands)
March 31, 1998 Dec. 31, 1997
ASSETS (unaudited)
Current assets
Cash $431 $1,632
Trade receivables 7,925 7,050
Inventories 39,710 39,664
Prepaid expenses 1,291 1,110
Deferred taxes 824 824
Total current assets 50,181 50,280
Property and equipment 20,947 20,460
Less accumulated depreciation (6,640) (6,280)
Property and equipment, net 14,307 14,180
Goodwill and other assets 10,975 11,048
Total assets $75,463 $75,508
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of
long-term debt $1,069 $1,173
Short term notes 5,963 6,515
Accounts payable 12,470 11,984
Accrued liabilities 5,687 5,380
Customer deposits 2,956 3,585
Total current liabilities 28,145 28,637
Long-term debt, net of
current maturities 21,399 22,075
Deferred grant income 219 237
Deferred taxes 681 682
Commitments and contingencies
Shareholders' equity 25,019 23,877
Total liabilities and
shareholders' equity $75,463 $75,508
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.