Featherlite Reports Third-Quarter Results
31 October 2000
Featherlite Reports Third-Quarter Results
CRESCO, Iowa, Oct. 31 Featherlite, Inc. , a
leading manufacturer and marketer of specialty aluminum trailers and luxury
motorcoaches, today reported net sales for the third quarter ended Sept. 30,
2000, of $51.7 million, compared with $53.6 million in the third quarter of
1999. The company reported a net loss for the third quarter of $637,000 or
10 cents per diluted share, which is consistent with the range estimated by
the company in a news release on Oct. 17. Net earnings in the third quarter
of 1999 were $1.0 million, or 16 cents per diluted share
Conrad Clement, chairman and chief executive officer, said, "Our third
quarter sales in the luxury motorcoach division were well below our
expectations, even with our cautious outlook for sales in that segment of our
business. Solid sales performance continued in our specialty trailer and
transporter segment but gross profit margin declined in that segment from last
year's particularly strong level."
Income from operations in the third quarter was $92,000, compared with
$2,102,000 in 1999. Gross margin was 12.9 percent in the quarter compared to
15.0 percent last year, reflecting a gross margin decline in both
Featherlite's specialty trailer segment and in the luxury motorcoach segment.
The decline in specialty trailer gross margin was attributable to lower labor
productivity due to workforce expansion in the summer months and above-average
materials usage in comparison to last year's strong level.
Selling, general and administrative expense was 12.7 percent of sales in
the third quarter, an increase over last year's level of 11.1 percent. The
expense ratio in the specialty trailer segment improved in the third quarter,
but was offset by an increase in the motorcoach segment, reflecting increased
sales and marketing expense, and research and development expense in support
of the new Featherlite Vogue(TM) 6000 model that will be introduced in the
fourth quarter of 2000.
"In response to unsatisfactory results in the third quarter, we have
implemented extensive expense reduction measures, including unit volume and
staff reductions in the motorcoach division," Clement said. "We have also
deferred the opening of our planned sales and service facility in Statesville,
N.C., from year-end to later in 2001.
"Despite our shortfall in the quarter, I am pleased with the continued
solid sales growth of Featherlite's specialty trailers and transporters,"
Clement said. "We have developed innovative new trailer models, continue to
advance the technology of trailer safety and performance and our dealer
network continues to expand."
For the nine months ended Sept. 30, 2000, net sales increased by
11 percent to $187.3 million compared with $168.8 million in 1999. This
increase included a 19 percent increase in sales of specialty trailers and
transporters, which were up in all categories except utility trailers. On a
consolidated basis, the company's net income for the first nine months of 2000
was $1.2 million or 17 cents per diluted share, compared with $3.6 million, or
55 cents per diluted share in 1999.
"For the balance of 2000 we anticipate continued strength in our specialty
trailer segment sales," Clement said. "We continue to receive positive
response from our dealers and solid customer demand for Featherlite trailers
at the retail level. In our motorcoach segment, despite an increase in our
backlog from June 30 levels, we remain cautious about the near-term outlook."
Featherlite, Inc.
Condensed Statements of Income
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2000 1999(a) 2000 1999(a)
Net sales $51,745 $53,598 $187,306 $168,793
Cost of sales 45,088 45,544 161,673 143,850
Gross profit 6,657 8,054 25,633 24,943
Selling and administrative
expenses 6,565 5,952 20,901 17,408
Income from operations 92 2,102 4,732 7,535
Other income (expense)
Interest (1,233) (893) (3,548) (2,665)
Gain on aircraft and
property sales -- 179 118 408
Other, net 93 143 584 529
Total other expense (1,140) (571) (2,846) (1,728)
Income (loss) before income
taxes (1,048) 1,531 1,886 5,807
Provision (benefit) for
income taxes (411) 485 734 2,207
Net income (loss) $(637) $1,046 $1,152 $3,600
Net income (loss) per
common share:
Basic and diluted $(0.10) $0.16 $0.17 $0.55
Weighted average shares
outstanding:
Basic 6,535 6,507 6,535 6,502
Diluted 6,535 6,531 6,535 6,520
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)
Sept. 30, 2000 Dec. 31, 1999
ASSETS (unaudited)
Current assets
Cash $268 $248
Receivables 10,833 8,915
Inventories 90,557 74,632
Prepaid expenses 1,518 1,547
Deferred taxes 1,665 1,159
Total current assets 104,841 86,501
Property and equipment, net 20,372 19,880
Goodwill and other assets 13,119 13,403
Total assets $138,332 $119,784
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $2,054 $1,770
Other notes payable 25,175 22,919
Accounts payable 28,755 18,664
Accrued liabilities 7,466 6,405
Customer deposits 6,602 4,678
Total current liabilities 70,052 54,436
Long-term debt, net of current maturities 32,200 30,563
Other long term liabilities 1,052 1,059
Shareholders' equity 35,028 33,726
Total liabilities and
shareholders' equity $138,332 $119,784
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.