Featherlite Second-Quarter Net Income Rises
29 July 1998
Featherlite Second-Quarter Net Income Rises 64 Percent on Sales Increase of 51 Percent to $49 Million
CRESCO, Iowa, July 29 -- Featherlite, Inc. , a
leading manufacturer and marketer of specialty aluminum trailers and luxury
motorcoaches, today reported net sales for the second quarter ended June 30,
1998, of $49.3 million, up 51 percent from net sales of $32.7 million in last
year's second quarter. Net income for the second quarter was $1,005,000, or
15 cents per diluted share, up 63.7 percent from net income of $614,000, or
10 cents per diluted share, in the second quarter of last year.
For the six months ended June 30, 1998, net sales were $91.0 million, up
36.5 percent from net sales of $66.7 million in last year's comparable
six-month period. Net income for the six months ended June 30, 1998, was
$2,146,000, or 33 cents per diluted share, up 56.5 percent from net income of
$1,371,000, or 22 cents per diluted share, last year.
Conrad Clement, chairman and chief executive officer, said, "We are
extremely pleased with our results, which set new records for the second
quarter and six months in both sales and net income. Our second quarter sales
growth was led by a doubling of sales in the Featherlite Luxury Motorcoach
Division. This division was expanded in May 1998 when Featherlite acquired
the assets of Mitchell Motorcoach Sales, manufacturer and distributor of the
high quality Vogue line of luxury motorcoaches and bus conversion vehicles.
In the quarter we achieved strong growth in Vantare by Featherlite(R) sales
and added $4.5 million in sales of Featherlite Vogue(R) luxury motorcoaches.
We also achieved a solid 22 percent increase in horse and livestock trailer
sales. Sales of car trailers and race car transporters increased by
10 percent over last year. Commercial trailer sales, a category which we have
de-emphasized, declined from last year's level, as did sales of utility and
recreational trailers due to reduced sales of personal watercraft trailers."
Operating income for the second quarter was $2,113,000, up 53 percent from
$1,384,000 last year. The increase was due to significantly higher sales
resulting in good expense leverage. Selling and administrative expenses
improved to 10.7 percent of sales in the quarter, down from 11.7 percent last
year. Gross profit margin in the second quarter was 15.0 percent, compared
with 15.9 percent in the second quarter of last year. The reduced gross
margin percent was attributable to lower margins on Featherlite Vogue
motorcoaches, stemming from sales commitments made prior to the acquisition in
May by Featherlite. A review of pricing and other operating factors was
instituted during the second quarter with the objective of improving margins
on the Featherlite Vogue product line in the near-term.
Diversification Continues to Drive Strong Performance
"Our strong performance in both the second quarter and the six-month
period continues to reflect the benefits of our diversification program and
the strategic progress that we are accomplishing," Clement said. "The
Featherlite Vogue acquisition, which will increase our luxury motorcoach
business to more than $70 million in annual sales, is a perfect strategic fit
for Featherlite. It increased our price point range and broadened our market
coverage of this exciting and rapidly growing category. With the addition of
Featherlite Vogue models to our existing Vantare by Featherlite product line,
we continue to set the pace in the luxury motorcoach industry. We offer the
innovative designs, top quality products and the most wanted features and
amenities expected by discriminating luxury motorcoach customers, including
affluent individuals, corporations, sports celebrities and motorsports teams,
drivers and sponsors. Our diversification strategy has positioned Featherlite
as the dominant provider of high-end luxury bus conversion motorcoaches in the
U.S."
Outlook for the Second Half Remains Strong
"We continue to be very optimistic about the prospects for increased sales
in all of our product categories for the second half of the year," Clement
said. "Our order backlog for 1998 delivery was nearly $32 million at the end
of the quarter compared with $27 million last year.
"The outlook for solid sales gains in the Featherlite Luxury Motorcoach
Division, now our largest single product category, give us particular optimism
about the second half of the year, and we are in a very strong position to
further increase our share of the rapidly growing luxury motorcoach and bus
conversion market.
"Our advertising and marketing programs, with strong tie-ins to the
dynamic and exciting motorsports industry, continue to benefit our business in
the motorcoach category as well in our specialty trailer lines.
"Featherlite specialty trailers -- our flagship category, with the
industry's broadest product line consisting of more than 400 models -- also
add to our enthusiastic outlook for a strong second half. The Featherlite
25th anniversary model trailers are selling well, a testimony to the strong
customer loyalty that has been achieved over the years. With new trailer
models, new standard features and new custom amenities, coupled with a strong
network of quality dealers nationwide, our trailer business is very well
positioned for continued growth."
About Featherlite
Featherlite, Inc. (Formerly Featherlite Mfg., Inc.), 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) World of Outlaws
(W.O.O.) and NHRA. Through its Vantare by Featherlite and Featherlite Vogue
product lines, Featherlite is the "Official Luxury Motorcoach" of NASCAR, IRL,
SPORTSCAR, CART and NHRA. For more information about the company, please
visit Featherlite's website at http://www.featherlitemfg.com
Featherlite, Inc.
Condensed Statements of Income
(In thousands, except per share data)
(unaudited)
Three Months Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
Net sales $49,294 $32,652 $91,036 $66,686
Cost of sales 41,905 27,451 76,730 56,390
Gross profit 7,389 5,201 14,306 10,296
Selling and
administrative expenses 5,276 3,817 9,937 7,416
Income from operations 2,113 1,384 4,369 2,880
Other income (expense)
Interest (685) (440) (1,261) (776)
Other, net 249 78 471 180
Total other expense (436) (362) (790) (596)
Income before taxes 1,677 1,022 3,579 2,284
Provision for income taxes 672 408 1,433 913
Net income $1,005 $614 $2,146 $1,371
Net income per common share:
Basic $0.16 $0.10 $0.34 $0.22
Diluted $0.15 $0.10 $0.33 $0.22
Weighted average shares
outstanding:
Basic 6,414 6,255 6,335 6,255
Diluted 6,571 6,326 6,456 6,311
Featherlite, Inc.
Condensed Balance Sheets
(In thousands)
June 30, 1998 Dec. 31, 1997
ASSETS
(unaudited)
Current assets
Cash $2,034 $1,632
Trade receivables 9,228 7,050
Inventories 49,052 39,664
Prepaid expenses 1,407 1,110
Deferred taxes 824 824
Total current assets 62,545 50,280
Property and equipment, net 14,893 14,180
Goodwill and other assets 17,605 11,048
Total assets $95,043 $75,508
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of
long-term debt $1,025 $1,173
Short term notes 11,771 6,515
Accounts payable 18,640 11,984
Accrued liabilities 5,125 5,380
Customer deposits 3,055 3,585
Total current liabilities 39,616 28,637
Long-term debt, net of current
maturities 26,022 22,075
Deferred grant income 200 237
Deferred taxes 682 682
Shareholders' equity 28,523 23,877
Total liabilities and
shareholders' equity $95,043 $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.