Exhibit 99.1
FOR RELEASE: 10:00 AM Thursday, 11/04/2004
CONTACT:
Irving Smith, CFO
Fountain Powerboat Industries, Inc.
ismith@fountainpowerboats.com
252-975-2000
FOUNTAIN POWERBOAT INDUSTRIES, INC. REPORTS
FIRST QUARTER RESULTS
WASHINGTON, NC,November 4, 2004 — Fountain Powerboat Industries, Inc. (NASDAQ;FPWR), a leading manufacturer of high performance sport boats, fish boats and express cruisers, announces results for the first quarter of fiscal 2005 ending September 30, 2004.
Net sales for the quarter were $16,803,907 up from $12,885,232 for the first quarter of fiscal 2004, a 30.4% increase. Operating earnings for the quarter was $509,139 as compared to $110,752 for the first quarter of fiscal 2004. Net earnings were $313,925, or $.07 per share for the quarter compared to a net loss of $356,347, or $(.08) for the same quarter of fiscal 2004.
Sales for the first quarter of Fiscal 2005 increased by $3,918,675, or 30.4%, over sales for the first quarter of Fiscal 2004. The increase in sales is attributed to an improved sales model mix and an increase in the number of boats produced by the Company. Fountain’s firm order backlog at $34 million continues to be strong, especially for this time of year.
Fountain’s project to enhance the process flow and efficiency of the factory is almost complete, included is a new state of the art ventilation and dust collection system that will meet or exceed Air Quality MACT standard and OSHA regulations. This project will facilitate cost reduction and increased production capacity.
New fish boat models being developed by Fountain will soon be introduced to give the Company a more predominant presence in the very active fish boat market. The Company has just successfully introduced an all new 42’ Poker Run Sport Boat that was born out of its current and past National and World Champion Super V Race Boat; this is the same design that recently set the World V-Bottom Speed Record of 171.883 MPH. New product development at Fountain Powerboats is in high gear.
“We are taking the necessary steps in all areas of our Company to attain our Fiscal 2005 business plan of $67 million sales and to propel us to $80 million sales in Fiscal 2006. We accomplished our goals for the past two years, and short of any unforeseen setback in the economy or the marine industry, we expect to continue to meet our goals”, states Reginald M. Fountain, Jr., Fountain President and Chief Executive Officer.
###
Safe Harbor for forward-looking statements:
Except for the historical information contained herein, this press release contains forward-looking statements, including statements containing the words “planned,” “expects,” “believes,” “strategy,” “opportunity,” “anticipates” and similar words. Such forward-looking statements are subject to known and unknown risks, uncertainties or other factors that may cause the company’s actual results to be materially different from historical results or any results expressed or implied by such forward-looking statements. We assume no obligation to update any forward-looking statements to reflect events or circumstances arising after the date hereof. The potential risks and uncertainties which could cause actual growth and results to differ materially include but are not limited to, customer acceptance of the company’s services, products and fee structures, the success of the company’s brand development efforts, the volatile and competitive nature of the industry, and changes in domestic and international market conditions, and foreign exchange rates. Further information on the factors and risks that could affect Fountain Powerboat Industries, Inc. business, financial condition and results of operations are included under the “Risk Factors” or “Factors Affecting our Operating Results” sections of Fountain Powerboat Industries, Inc. public filings with the Securities and Exchange Commission, available at (http://www.sec.gov).
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| | | | | | | | |
| | | September 30,
2004
| | | June 30, 2004
| |
| ASSETS | | | | | | | | |
CURRENT ASSETS: | | | | | | | | |
Cash and cash equivalents | | $ | 3,761,233 | | | $ | 3,713,789 | |
Accounts receivable, net | | | 4,177,598 | | | | 4,137,484 | |
Inventories | | | 4,913,053 | | | | 4,653,402 | |
Prepaid Expenses | | | 513,116 | | | | 429,657 | |
Current tax assets | | | 279,876 | | | | 268,903 | |
| | |
|
|
| |
|
|
|
Total Current Assets | | | 13,644,876 | | | | 13,203,235 | |
| | |
|
|
| |
|
|
|
PROPERTY, PLANT AND EQUIPMENT | | | 43,866,187 | | | | 43,183,460 | |
Less: Accumulated depreciation | | | (27,671,682 | ) | | | (27,269,666 | ) |
| | |
|
|
| |
|
|
|
| | | | 16,194,505 | | | | 15,913,794 | |
| | |
|
|
| |
|
|
|
CASH SURRENDER VALUE LIFE INSURANCE | | | 1,635,939 | | | | 1,581,316 | |
OTHER ASSETS | | | 740,794 | | | | 665,815 | |
| | |
|
|
| |
|
|
|
TOTAL ASSETS | | $ | 32,216,114 | | | $ | 31,364,160 | |
| | |
|
|
| |
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | |
Current maturities - long-term debt | | $ | 767,720 | | | $ | 772,704 | |
Current maturities - capital lease | | | 22,694 | | | | 17,710 | |
Accounts payable | | | 3,801,378 | | | | 2,821,866 | |
Accounts payable - related party | | | 26,875 | | | | 21,000 | |
Accrued expenses | | | 718,184 | | | | 1,172,210 | |
Dealer incentives | | | 1,310,765 | | | | 1,203,522 | |
Customer deposits | | | 146,420 | | | | 86,077 | |
Allowance for boat repurchases | | | 75,000 | | | | 75,000 | |
Warranty reserve | | | 710,000 | | | | 710,000 | |
| | |
|
|
| |
|
|
|
Total Current Liabilities | | | 7,579,036 | | | | 6,880,089 | |
LONG-TERM DEBT, less current maturities | | | 17,693,868 | | | | 17,870,041 | |
CAPITAL LEASE, less current maturities | | | — | | | | 6,657 | |
DEFERRED TAX LIABILITY | | | 279,876 | | | | 268,903 | |
| | |
|
|
| |
|
|
|
COMMITMENTS AND CONTINGENCIES | | | | | | | | |
Total Liabilities | | | 25,552,780 | | | | 25,025,690 | |
| | |
|
|
| |
|
|
|
STOCKHOLDERS’ EQUITY: | | | | | | | | |
Common stock, $.01 par value, 200,000,000 shares authorized, 4,814,275 shares issued and outstanding as of September 30, 2004 and 4,807,608 as of June 30, 2004 | | | 48,142 | | | | 48,076 | |
Additional paid-in capital | | | 10,527,053 | | | | 10,517,451 | |
Accumulated earnings (deficit) | | | (3,785,614 | ) | | | (4,099,540 | ) |
| | |
|
|
| |
|
|
|
| | | | 6,789,581 | | | | 6,465,987 | |
Less: Treasury stock, at cost, 15,000 shares | | | (110,748 | ) | | | (110,748 | ) |
Accumulated other comprehensive income from interest rate swap | | | (15,499 | ) | | | (16,769 | ) |
| | |
|
|
| |
|
|
|
Total Stockholders’ Equity | | | 6,663,334 | | | | 6,338,470 | |
| | |
|
|
| |
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 32,216,114 | | | $ | 31,364,160 | |
| | |
|
|
| |
|
|
|
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| | | | | | | | |
| | | For the Three Months Ended
| |
| | | September 30,
2004
| | | September 30,
2003
| |
NET SALES | | $ | 16,803,907 | | | $ | 12,885,232 | |
COST OF SALES | | | 14,320,056 | | | | 10,853,051 | |
| | |
|
|
| |
|
|
|
Gross Profit | | | 2,483,851 | | | | 2,032,181 | |
| | |
|
|
| |
|
|
|
EXPENSES: | | | | | | | | |
Selling expense | | | 1,387,924 | | | | 1,355,570 | |
General and administrative | | | 586,788 | | | | 565,859 | |
| | |
|
|
| |
|
|
|
Total Expenses | | | 1,974,712 | | | | 1,921,429 | |
| | |
|
|
| |
|
|
|
OPERATING INCOME | | | 509,139 | | | | 110,752 | |
| | |
|
|
| |
|
|
|
NON-OPERATING INCOME (EXPENSE): | | | | | | | | |
Other income (expense) | | | 698 | | | | 3,059 | |
Interest expense | | | (195,912 | ) | | | (470,158 | ) |
| | |
|
|
| |
|
|
|
Total Non-operating Income (Expense) | | | (195,214 | ) | | | (467,099 | ) |
| | |
|
|
| |
|
|
|
INCOME BEFORE INCOME TAXES | | | 313,925 | | | | (356,347 | ) |
CURRENT TAX EXPENSE (BENEFIT) | | | — | | | | — | |
DEFERRED TAX EXPENSE (BENEFIT) | | | — | | | | — | |
| | |
|
|
| |
|
|
|
NET INCOME (LOSS) | | $ | 313,925 | | | $ | (356,347 | ) |
| | |
|
|
| |
|
|
|
BASIC EARNINGS (LOSS) PER SHARE | | $ | 0.07 | | | $ | (0.08 | ) |
| | |
|
|
| |
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING | | | 4,808,260 | | | | 4,757,608 | |
| | |
|
|
| |
|
|
|
DILUTED EARNINGS PER SHARE | | $ | 0.06 | | | $ | NA | |
| | |
|
|
| |
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING ASSUMING DILUTION | | | 4,862,420 | | | | 4,824,089 | |
| | |
|
|
| |
|
|
|
