Featherlite Reports Record Net Income and Sales for Fiscal Year 1999
10 February 2000
Featherlite Reports Record Net Income and Sales for Fiscal Year 1999; Fourth-Quarter Net Income Below Expectations
CRESCO, Iowa, Feb. 9 -- Featherlite, Inc. , a
leading manufacturer and marketer of specialty aluminum trailers and luxury
motorcoaches, today reported net sales for the year ended Dec. 31, 1999, of
$226.1 million, up 18.5 percent from net sales of $190.9 million last year.
Net income for the year was $3,974,000, or 61 cents per diluted share, up
8.9 percent from net income of $3,650,000, or 56 cents per diluted share, last
year.
For the fourth quarter ended Dec. 31, 1999, net sales were $56.5 million,
up 10.8 percent from net sales of $50.9 million in the fourth quarter of last
year. Net income for the fourth quarter declined to $374,000, or 6 cents per
share, from $980,000, or 15 cents per share, last year.
Conrad Clement, chairman and chief executive officer, said, "Although we
are disappointed in fourth-quarter results, we achieved new records in sales
and net income for the full fiscal year, our third consecutive year of
record-setting performance. In our specialty trailer segment, we further
improved our manufacturing processes and achieved an increase in gross margin
percent, while generating sales growth over 1998. During 1999 we also
enhanced our dealer organization with a greater number of high-volume
dealerships and additional dealers in underserved geographic areas. The nine
new models of horse trailers and car transporters we added during the year
have strengthened Featherlite's product offering and have been well-received
by both dealers and customers.
"In our luxury motorcoach segment, we continued to make strategic progress
through combining our Vantare(TM) and Vogue(R) operations into the Featherlite
Luxury Coach Division, and at year-end significantly added to our management
strength with the appointment of Charles Dorrity as President of the
Featherlite Luxury Coach Division. Charlie has been Vice President of our
Cresco, Iowa, operations, and since joining Featherlite approximately three
years ago has demonstrated both strong leadership and exceptional operating
skills. He has more than 18 years' experience in the recreational vehicle
industry. We expect Charlie's appointment as President of this key business
segment, together with the appointment of Bob Basse as our new vice president
of sales and marketing, will lead to improved operations in the Luxury Coach
Division.
"For the fourth quarter, despite achieving a sales increase over last year
in both our specialty trailer and luxury motorcoach segments, sales of Vogue
Class 'A' coaches came in below our expectations," Clement said. "Gross
margin percent declined from last year's level in the fourth quarter in both
business segments, and although we had a modest improvement in selling,
general and administrative expense as a percent of sales, the
lower-than-anticipated sales performance resulted in this ratio still being
higher than we planned. We have analyzed the factors behind our fourth
quarter sales shortfall, have taken appropriate action in our luxury coach
division and are anticipating a favorable benefit from our new motorcoach
sales and service facility in Sanford, Fla., as we move into the spring
selling season. In addition, we anticipate opportunities for additional sales
growth in our Vogue motorcoach business and are pleased to have Destinations
RV, Inc., the West's fastest growing recreational vehicle dealership, as our
exclusive dealer in seven Western states for Featherlite's high-end Vogue 5000
line of luxury custom-built motorcoaches."
Looking Forward
"We are optimistic about our prospects for continued growth in 2000 and in
the future," Clement said. "Our business segments are well-positioned to
serve their markets and to benefit from the continued growth in the leisure,
recreation and entertainment -- particularly motorsports -- categories.
Featherlite's anticipated aluminum purchases are locked in for 2000 at prices
that are favorable to what we paid in 1999, and we will be adding additional
new models of specialty trailers during 2000. We also anticipate cost savings
in our Luxury Coach Division as we begin to benefit from the consolidation of
our two motorcoach operations, and will add two new luxury coach models to our
Vogue line in the second half of the year.
"We have meaningfully strengthened management in key areas, further
improved Featherlite's dealer organization and continued to develop the
quality of our manufacturing operations. With our reputation for product
innovation, quality and customer satisfaction, we are confident in our ability
to continue to expand our market share in both of our business segments and
improve the profitability of our operations," 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
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 BlueFire Partners, 612-344-1036
for Featherlite, Inc., or Jeffery A. Mason, CFO of Featherlite, Inc.,
319-547-6000.
Featherlite, Inc.
Condensed Statements of Income
(In thousands, except per share data)
Three Months Ended Dec. 31, Year Ended Dec. 31,
1999 1998 1999 1998
(unaudited)
Net sales $56,452 $50,942 $226,108 $190,874
Cost of sales 48,057 42,268 190,065 160,364
Gross profit 8,395 8,674 36,043 30,510
Selling and
administrative expenses 6,981 6,549 27,094 22,385
Income from operations 1,414 2,125 8,949 8,125
Other income (expense)
Interest (1,103) (851) (3,768) (2,961)
Gain on aircraft and
property sales 26 -- 434 133
Other, net 266 264 795 690
Total other expense (811) (587) (2,539) (2,138)
Income before taxes 603 1,538 6,410 5,987
Provision for income taxes 229 558 2,436 2,337
Net income $374 $980 $3,974 $3,650
Net income per common share:
Basic $0.06 $0.15 $0.61 $0.56
Diluted $0.06 $0.15 $0.61 $0.56
Weighted average shares
outstanding:
Basic 6,535 6,493 6,531 6,462
Diluted 6,538 6,497 6,545 6,559
Featherlite, Inc.
Condensed Balance Sheets
(In thousands)
Dec. 31, 1999 Dec. 31, 1998
ASSETS
Current assets
Cash $248 $188
Trade receivables 8,765 10,332
Inventories 74,632 61,373
Prepaid expenses 1,698 1,522
Deferred taxes 1,159 1,107
Total current assets 86,502 74,522
Property and equipment, net 19,880 15,868
Goodwill and other assets 13,403 16,398
Total assets $119,785 $106,788
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $1,506 $1,241
Other notes payable 22,919 17,936
Accounts payable 18,664 18,221
Accrued liabilities 6,405 5,720
Customer deposits 4,678 2,241
Total current liabilities 54,172 45,359
Long-term debt, net of current
maturities 30,827 30,914
Other long term liabilities 1,060 972
Shareholders' equity 33,726 29,543
Total liabilities and
shareholders' equity $119,785 $106,788