Featherlite Reports Second Quarter Results
28 July 1999
Featherlite Reports Second Quarter Results; Net Sales Up 14 Percent to $56.3 Million; Net Income of 15 Cents Per Diluted Share Equals Last Year
CRESCO, Iowa, July 28 -- 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,
1999, of $56.3 million, up 14.2 percent from net sales of $49.3 million in
last year's second quarter. Net income for the second quarter was $1,010,000,
or 15 cents per diluted share, vs. $1,005,000, or 15 cents per diluted share,
in the second quarter of last year.
Conrad Clement, chairman and chief executive officer, said, "Our growth in
second-quarter sales was led by a double-digit gain in sales of Featherlite
luxury motorcoaches. While overall sales were below our expectations in the
quarter, our improvement in gross margin percent enabled Featherlite to report
net income that was essentially equal to last year's level."
Featherlite's second quarter net sales increased $7.0 million over the
second quarter of 1998, a 14.2 percent gain. Sales of Featherlite Luxury
Motorcoaches, Featherlite Vantare(TM) and Featherlite Vogue(R), rose 38
percent over the second quarter of 1998 reflecting, in part, the addition of
the Vogue line of luxury motorcoaches acquired in May 1998. On a comparable
basis, adjusting for the pre-acquisition sales of Vogue in the second quarter
of last year, luxury motorcoach sales gained 14 percent over the second
quarter of 1998. Sales of Featherlite specialty trailers declined 5 percent
in the second quarter, reflecting a significant decline in livestock trailers
which was partially offset by modest sales gains in horse trailers and
custom-designed specialized transporters, including car trailers and race car
transporters. Sales of commercial trailers, a category being de-emphasized
by Featherlite, declined from the year-ago level.
"Our diversification strategy continues to pay off, as we have continued
to experience sluggish sales of our livestock trailers in the second quarter,"
Clement said. "This softening in demand, which has been significant since the
third quarter of 1998, parallels the overall difficulties in the agribusiness
economy. Sales of Featherlite Vantare Prevost conversions were up 37 percent
in the second quarter and are up 30 percent in the first six months. Sales of
Featherlite Vogue luxury motorcoaches were lower than expected in the second
quarter."
Gross profit margin in the second quarter was 15.7 percent, compared with
15.0 percent in the second quarter of last year. Selling and administrative
expenses were 11.5 percent of sales in the quarter, compared with 10.7 percent
last year.
For the six months ended June 30, 1999, net sales were $115.7 million, up
27.1 percent from net sales of $91.0 million in last year's comparable six-
month period. Net income for the six months was $2,554,000, or 39 cents per
diluted share, vs. $2,146,000, or 33 cents per diluted share, in the six-month
period of last year.
Looking Forward
"We have entered the second half of the year well-positioned to achieve
market share growth in each of our product categories," Clement said. "Our
positioning in the growing luxury motorcoach market has been meaningfully
strengthened with the addition of an outstanding dealership arrangement to
build distribution of our Vogue 5000 luxury motorcoaches in the western United
States."
Featherlite announced in June that it had selected Destinations RV, Inc.,
the West's fastest growing recreational vehicle dealership with locations in
Coburg and Bend, Ore., as an exclusive dealer for Featherlite's high-end Vogue
5000 line of luxury custom-built motorcoaches. The agreement provides
Destinations RV with exclusive sales rights in the western United States, a
region in which sales of this product line were previously very limited.
"We also expect that the recently announced consolidation of our
Featherlite Vantare and Featherlite Vogue organizations will result in a
strongly unified sales and marketing thrust which will benefit both product
lines," Clement said. "And the opening, in the third quarter, of our new
Featherlite Luxury Coach Division Sales and Service Center in Sanford, Fla.,
supporting both the Featherlite Vantare and Featherlite Vogue lines, will
provide excellent brand visibility and customer convenience from its high-
visibility and high-traffic location on Interstate-4.
"Overall, our specialty trailer business is also well-situated for good
growth and continued profitability. Our dealer network, consisting of more
than 250 full-line and a significant number of limited-line dealers, has never
been stronger. We continue to add new features and models to our broad line
of standard-model and custom-designed trailers and transporters, which have
been selling well to and through our dealer network. Dealer inventory
continues to turn well and inventory levels have declined since the beginning
of the year. Order backlog remains strong, having increased by 20 percent
since Mar. 31, and is more than 10 percent above last year's June 30 level.
"With our first-half net income growth of 18 percent, and with the
opportunities we see for the second half of 1999, we continue to expect a
record year for Featherlite, both in terms of sales by product category --
luxury motorcoaches and specialty trailers -- and record total sales and net
income." Clement said.
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)
(unaudited) Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
Net sales $56,295 $49,294 $115,717 $91,036
Cost of sales 47,475 41,905 97,200 76,730
Gross profit 8,820 7,389 18,517 14,306
Selling and administrative
expenses 6,450 5,276 13,084 9,937
Income from operations 2,370 2,113 5,433 4,369
Other income (expense)
Interest (839) (685) (1,737) (1,261)
Other, net 151 249 580 471
Total other expense (688) (436) (1,157) (790)
Income before taxes 1,682 1,677 4,276 3,579
Provision for income taxes 672 672 1,722 1,433
Net income $1,010 $1,005 $2,554 $2,146
Net income per common and
common equivalent share:
Basic $0.15 $0.16 $0.39 $0.34
Diluted $0.15 $0.15 $0.39 $0.33
Weighted average shares outstanding:
Basic 6,500 6,414 6,500 6,335
Diluted 6,525 6,571 6,515 6,456
Featherlite, Inc.
Condensed Balance Sheets
(In thousands)
June 30, 1999 Dec. 31, 1998
ASSETS
(unaudited)
Current assets
Cash $210 $188
Receivables 12,253 10,332
Inventories 63,148 61,373
Prepaid expenses 1,506 1,522
Deferred taxes 1,107 1,107
Total current assets 78,224 74,522
Property and equipment, net 17,624 15,868
Goodwill and other assets 16,045 16,398
Total assets $111,893 $106,788
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $1,206 $1,241
Other notes payable 19,209 17,936
Accounts payable 18,659 18,221
Accrued liabilities 5,106 5,720
Customer deposits 4,771 2,241
Total current liabilities 48,951 45,359
Long-term debt, net of current maturities 29,746 30,914
Other long term liabilities 950 972
Shareholders' equity 32,246 29,543
Total liabilities and
shareholders' equity $111,893 $106,788
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, 612-371-0000, for Featherlite, Inc., or Jeffery A. Mason, CFO of
Featherlite, Inc., 319-547-6000.