Featherlite Reports Record Net Income And Sales For Fiscal Year 1998
17 February 1999
Featherlite Reports Record Net Income And Sales For Fiscal Year 1998; Net Sales Rise 42 Percent To $191 Million
CRESCO, Iowa, Feb. 17 -- Featherlite, Inc. , a
leading manufacturer and marketer of specialty aluminum trailers and luxury
motorcoaches, today reported record sales for the year ended Dec. 31, 1998, of
$190.9 million, up 42.0 percent from sales of $134.4 million last year. Net
income for the year was a record $3,650,000, or 56 cents per diluted share, up
11.2 percent from net income of $3,282,000, or 52 cents per diluted share,
last year.
Conrad Clement, chairman and chief executive officer, said, "Fiscal 1998
was a year of both operating improvement and significant strategic progress
for Featherlite. Both net income and net sales set new annual records, and
our successfully completed acquisition of the Vogue line of luxury
motorcoaches and bus conversion vehicles established Featherlite as the
dominant manufacturer of luxury bus conversion motorcoaches in the United
States."
Featherlite's fiscal 1998 net sales increased $56.5 million over 1997,
$22.8 million of which was contributed by the addition of the Featherlite
Vogue(R) line of luxury motorcoaches and bus conversion vehicles acquired in
May 1998. The balance of the sales increase over 1997, $33.7 million,
resulted from growth in established product categories, including a 58 percent
increase in sales of Featherlite Vantare(TM) luxury motorcoaches. Sales of
specialized transporters, including custom-designed car and race car
transporters, increased 19 percent and sales of horse trailers led
Featherlite's specialty trailer product line with an increase of 24 percent.
Gross profit margin for the year was 16.0 percent of sales, compared with
16.8 percent last year. The principal factors in the gross margin decline
were the lower gross margin of Featherlite Vogue(R) products, many of which
were sold at prices set before the May 1998 acquisition, and a slowdown in
livestock trailer sales, due to difficult economic conditions in agribusiness,
which led to moderately reduced facilities utilization in Featherlite's
manufacturing plants during the second half of the year. Selling and
administrative expenses were 11.7 percent of sales, down from 11.9 percent
last year, reflecting expense leverage on increased sales.
"From a strategic standpoint, we have now created an effective balance
between our two business segments -- Featherlite trailers, including both
specialized transporters and specialty trailers, and luxury motorcoaches,"
Clement said. "We believe this strategic balance will enable Featherlite to
achieve strong growth in sales and profit over the long-term. Today, one-half
of Featherlite's business is in product categories that have been added since
1991 as a result of our aggressive diversification strategy. Our product
offerings in the entertainment, leisure, recreation and motorsports-related
markets now represent more than 80 percent of our business base, enabling our
company to profitably serve growing markets while benefiting from a product
line diversity that dampens the effect of inevitable business cycles in any
one sector of the economy. Our optimism for the future is also supported by
very favorable demographics, with millions of baby-boomers beginning to enjoy
increasing leisure time available for entertainment and recreational
activities.
"We are very pleased with our market positioning and our strategic
balance, and with the opportunity that they represent," Clement said.
For the fourth quarter ended Dec. 31, 1998, net sales were $50.9 million,
an increase of 45.7 percent from net sales of $35.0 million in last year's
fourth quarter. Net income for the fourth quarter was $980,000, or 15 cents
per diluted share, vs. net income of $1,023,000, or 16 cents per diluted
share, in the fourth quarter of last year.
Looking Forward
"We are optimistic about our prospects for profitable growth in 1999 and
for the long term," Clement said. "On the increased sales that we plan for the
coming year, we anticipate an improved operating margin percent. We are also
very pleased with the quality of our controls and infrastructure, the strength
of our management team and the continued improvement in the quality of our
dealer organization. We are well-positioned, in all respects, to achieve
leverage on our expanding sales base for strong performance in 1999 and the
years ahead."
About Featherlite
Featherlite, Inc., is an innovative leader in designing, manufacturing and
marketing high quality aluminum specialty trailers, transporters and luxury
motorcoaches. With 80 percent of its business in the leisure, recreation and
entertainment categories, Featherlite has highly diversified product lines
offering 400 standard model and custom-designed aluminum specialty trailers,
specialized transporters and luxury 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 the National Hot Rod
Association (NHRA). Through its Featherlite Vantare 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.featherliteinc.com
Featherlite, Inc.
Condensed Statements of Income
(In thousands, except per share data)
Three Months Ended Dec. 31, Year Ended Dec. 31,
1998 1997 1998 1997
(unaudited)
Net sales $50,943 $34,973 $190,874 $134,387
Cost of sales 42,268 28,448 160,364 111,764
Gross profit 8,675 6,525 30,510 22,623
Selling and admin-
istrative expenses 6,549 4,367 22,385 15,998
Income from
operations 2,126 2,158 8,125 6,625
Other income (expense)
Interest (838) (580) (2,961) (1,800)
Gain on aircraft and
property sales -- -- 133 264
Other, net 250 127 690 382
Total other expense (588) (453) (2,138) (1,154)
Income before taxes 1,538 1,705 5,987 5,471
Provision for income
taxes 558 682 2,337 2,189
Net income $980 $1,023 $3,650 $3,282
Net income per common
share:
Basic $0.15 $0.16 $0.56 $0.52
Diluted $0.15 $0.16 $0.56 $0.52
Weighted average shares
outstanding:
Basic 6,493 6,255 6,462 6,255
Diluted 6,497 6,305 6,559 6,314
Featherlite, Inc.
Condensed Balance Sheets
(In thousands)
Dec. 31, 1998 Dec. 31, 1997
ASSETS
Current assets
Cash $188 $1,632
Trade receivables 10,181 7,050
Inventories 61,373 39,664
Prepaid expenses 1,673 1,110
Deferred taxes 1,107 824
Total current assets 74,522 50,280
Property and equipment, net 15,868 14,180
Goodwill and other assets 16,565 11,048
Total assets $106,955 $75,508
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of
long-term debt $1,241 $1,173
Other notes payable 17,936 6,515
Accounts payable 18,221 11,984
Accrued liabilities 5,720 5,380
Customer deposits 2,241 3,585
Total current liabilities 45,359 28,637
Long-term debt, net of
current maturities 30,914 22,075
Other long term liabilities 972 919
Shareholders' equity 29,710 23,877
Total liabilities and
shareholders' equity $106,955 $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.
For more information, contact Doug Ewing of Swenson NHB Investor
Relations, 612-344-1036, for Featherlite, Inc., or Jeffery A. Mason, CFO of
Featherlite, 319-547-6000.