Featherlite Reports Second-Quarter Results
26 July 2000
Net Sales Up 18.8 Percent to $66.5 Million; Net Income at 17 Cents Per Diluted Share vs. 15 Cents Last Year
CRESCO, Iowa - 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, 2000, of $66.5 million, up 18.8 percent
from net sales of $56.0 million last year. Net income for the quarter was
$1,136,000, or 17 cents per diluted share, vs. net income of $1,011,000, or 15
cents per diluted share, last year.
Conrad Clement, chairman and chief executive officer, said, "We are
particularly pleased with the strong performance of our specialty trailer
segment in the second quarter. A good improvement in specialty trailer
operating margin resulted in our overall 19.5-percent increase in income from
operations. We continue to be pleased with specialty trailer sales growth and
with the positive acceptance of our new trailer models and features by
Featherlite's dealers and our customers."
The second-quarter sales gain consisted of a 19-percent increase in sales
of specialty trailers, reflecting strong sales gains in livestock trailers and
specialized transporters. All of Featherlite's major classifications of
specialty trailers registered sales gains over last year in the second
quarter. Luxury motorcoach sales increased 18 percent over last year's second
quarter.
Income from operations in the second quarter was $2,833,000 or 4.3 percent
of net sales, up 19.5 percent from $2,371,000, or 4.2 percent of net sales in
1999. Gross margin was 14.6 percent in the quarter compared to 14.1 percent
last year, reflecting an increase in gross margin in Featherlite's specialty
trailer segment and a decline in luxury motorcoach gross margin.
Selling, general and administrative expense was 10.3 percent of sales in
the second quarter, an increase over last year's level of 9.9 percent, due
principally to higher marketing expenses in both the specialty trailer and
motorcoach segments. As the result of Featherlite's adoption of FASB's
Emerging Issues Task Force conclusion on "Accounting for Shipping and Handling
Revenues and Costs," delivery charges are now being recorded as a component of
cost of sales rather than selling and administrative expense. 1999 accounts
have been restated to reflect this change, which had no effect on income from
operations or net income. As a percentage of net sales, both gross margin and
selling, general and administrative expenses decreased by 1.9 percentage
points in the second quarter of 2000 and 1.6 percentage points in the second
quarter of 1999 as a result of the reclassification.
For the six months ended June 30, 2000, net sales were $135.6 million, up
17.7 percent from net sales of $115.2 million in last year's comparable
six-month period. Net income for the six months was $1,789,000, or 27 cents
per diluted share, vs. $2,554,000, or 39 cents per diluted share, in the
six-month period of last year.
"For our specialty trailer business we anticipate continued good sales
growth for the balance of the year," Clement said. "Our order backlog for
specialty trailers is up substantially from year-ago levels and our continuing
introduction of new features, amenities and trailer models is keeping our
product lines fresh and responsive to the desires and expectations of our
customers."
Clement said, "In our motorcoach segment, we continue to work toward
improving production efficiency and controlling costs. In the first half of
2000 we launched our new Featherlite XLII luxury motorcoach and will introduce
a slide-out version of this new model in the second half of the year. We are
also on track toward introducing the new Featherlite Vogue(TM) 6000 motorcoach
in the second half of the year. In support of our focus on direct sales of
Featherlite luxury motorcoaches, we plan to open a new Featherlite Luxury
Coach Division Sales and Service Center at the end of this year. This new
sales and service facility will be in Statesville, N.C., strategically located
between Charlotte and Winston-Salem, and will further increase Featherlite's
brand visibility, direct sales and the proximity of our motorcoach service
capabilities to our many customers in this growing region." Featherlite's
first Luxury Coach Division Sales and Service Center, which opened in late
1999, is located in Sanford, Fla. Featherlite also said that it has
discontinued its motorcoach dealer relationship with Oregon-based Destinations
RV, Inc.
"We are cautious concerning sales growth in the motorcoach segment of our
business for the remainder of 2000. Our order backlog for motorcoaches is
below last year and recent new order volume has been weaker than we
anticipated. Since there is continued customer interest in the Featherlite
Vantare and Featherlite Vogue slide-out models, we are focusing our
production efforts on these models as well as the introduction of the new
Featherlite Vogue 6000 model," 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 more than 75 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.
Featherlite, Inc.
Condensed Statements of Income
(In thousands, except per share data)
(unaudited)
Three Months Ended June 30, Six Month Ended June 30,
2000 1999(a) 2000 1999(a)
Net sales $66,527 $55,987 $135,561 $115,195
Cost of sales 56,838 48,073 116,586 98,306
Gross profit 9,689 7,914 18,975 16,889
Selling and
administrative
expenses 6,856 5,543 14,336 11,456
Income from operations 2,833 2,371 4,639 5,433
Other income (expense)
Interest (1,238) (862) (2,315) (1,772)
Gain on aircraft and
property sales 13 18 118 229
Other, net 256 156 491 386
Total other expense (969) (688) (1,706) (1,157)
Income before taxes 1,864 1,683 2,933 4,276
Provision for income
taxes 728 672 1,144 1,722
Net income $1,136 $1,011 $1,789 $2,554
Net income per common share:
Basic and diluted $0.17 $0.15 $0.27 $0.39
Weighted average shares
outstanding:
Basic 6,535 6,500 6,535 6,500
Diluted 6,535 6,525 6,535 6,515
a) 1999 figures have been restated to reflect the adoption of the FASB
Emerging Issues Task Force conclusion on "Accounting for Shipping and Handling
Revenues and Costs" (EITF Issue No. 00-10), which resulted in the
reclassification of Featherlite's delivery charges into Cost of sales rather
than Selling and administrative expense. The restatement had no effect on
Income from operations or Net income.
Featherlite, Inc.
Condensed Balance Sheets
(In thousands)
June 30, Dec. 31,
2000 1999
ASSETS (unaudited)
Current assets
Cash $179 $248
Receivables 9,385 8,915
Inventories 82,409 74,632
Prepaid expenses 1,484 1,547
Deferred taxes 1,665 1,159
Total current assets 95,122 86,501
Property and equipment, net 20,381 19,880
Goodwill and other assets 13,304 13,403
Total assets $128,807 $119,784
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $2,030 $1,770
Other notes payable 17,634 22,919
Accounts payable 24,105 18,664
Accrued liabilities 11,898 6,405
Customer deposits 3,028 4,678
Total current liabilities 58,695 54,436
Long-term debt, net of current maturities 33,394 30,563
Other long term liabilities 1,053 1,059
Shareholders' equity 35,665 33,726
Total liabilities and
shareholders' equity $128,807 $119,784
