WASHINGTON, NC
,
SEPTEMBER 9, 2004
— Fountain Powerboat Industries, Inc. (NASDAQ:FPWR), a leading manufacturer of high performance sport boats, fish
boats and express cruisers, announces results for the fourth quarter and Fiscal year ended June 30, 2004. Sales for Fiscal 2004 were $59,642,766 as compared to sales of $52,557,084 for Fiscal 2003, a 13.5% increase. Operating earnings for Fiscal
2004 were $2,465,371 as compared to $2,089,110 operating earnings for Fiscal 2003, an increase of 18%. Net earnings were $1,312,170, or $.28 per share as compares with Fiscal 2003 net earnings of $879,996, or $.19 per share, a 49% increase.
Sales for the fourth quarter of Fiscal 2004 were $17,605,074, operating
earnings were $860,104 and net earnings were $675,092, or $.14 per share.
Sales for Fiscal 2004 increased by $7,085,682, or 13.5%, over sales for Fiscal year 2003. Sales for the fourth quarter of Fiscal 2004 increased by $2,774,647, or 18.7%, as compared to sales of $14,830,427 for the fourth quarter of Fiscal
2003. The increase in sales is attributed to an improving economy, strong sales at retail, introduction of new boat models and strengthening of the dealer network. Fountain’s firm order backlog was $39 million at June 30, 2004 as compared to a
backlog of $7.6 million at June 30, 2003.
Fountain is in the process of
developing several new fish boat models, to be introduced in the 2005 Fiscal year, to give the Company a more predominant presence in the active fish boat market, as well as significant model redesign and new model introduction of sport boats to
enhance Fountain’s “flag ship” product line.
Fountain has begun
a project to enhance the process flow and efficiency of the factory. A new state of the art ventilation and dust collection system is being installed that meets the “best engineering controls” criteria of the Air Quality MACT standard and
OSHA work place environment regulations. This project will be completed and operational in November of 2004 and will facilitate cost reduction and increased production.
“Our sales have been strong throughout the 2004 year, our backlog is at an all time high, and we are positioning for significant growth
in sales going forward by redesigning and increasing our already broad line of boat models and increasing the efficiency and production of our factory”, states Fountain President and Chief Executive Officer Reginald M. Fountain, Jr. “This
was our 25
th
anniversary year, and we are leveraging our investment of those years of research and development and
technology advancement to expand our product line at minimal costs. Sport boats continue to dominate our sales, but the new fish boats that we are developing will increase our
market share in that active market. The factory renovation in progress will boost our productivity and efficiency to
provide capacity for our planned growth in sales”, Fountain said.
###
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
).
###
Following are comparative Condensed Consolidated Statements of Income and Condensed Consolidated balance Sheets:
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
June 30,
2004
2003
ASSETS
CURRENT ASSETS:
Cash & cash equivalents
$
3,713,789
$
1,224,935
Accounts receivable, less allowance for doubtful accounts of $82,841 for 2004 and $27,841 for 2003
4,029,065
2,015,371
Inventories
4,661,566
3,460,286
Prepaid expenses
532,229
644,581
Current tax assets
303,823
303,823
Total Current Assets
13,240,472
7,648,996
PROPERTY, PLANT AND EQUIPMENT, net
15,913,794
16,165,684
CASH SURRENDER VALUE OF LIFE INSURANCE
1,581,316
1,378,626
OTHER ASSETS
494,200
736,288
$
31,229,782
$
25,929,594
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt
$
772,704
$
1,060,444
Current maturities of capital lease
17,710
20,118
Accounts payable
2,672,184
7,498,762
Accounts payable-related party
21,000
169,043
Accrued expenses
1,117,226
1,317,398
Dealer incentives
1,220,572
190,010
Customer deposits
86,077
290,658
Allowance for boat repurchases
75,000
200,000
Warranty reserve
710,000
900,000
Total Current Liabilities
6,692,473
11,646,433
LONG-TERM DEBT, less current maturities
17,870,041
8,986,160
CAPITAL LEASE, less current maturities
6,657
24,367
DEFERRED TAX LIABILITY
303,823
303,823
COMMITMENTS AND CONTINGENCIES
—
—
Total Liabilities
24,872,994
20,960,783
STOCKHOLDERS’ EQUITY
Common stock, $.01 par value, 200,000,000 shares authorized, 4,807,608 shares issued and outstanding
48,075
47,576
Additional paid-in capital
10,524,740
10,436,551
Retained earnings (deficit)
(4,088,510
)
(5,400,683
)
6,484,305
5,083,444
Less: Treasury Stock, at cost, 15,000 shares
(110,748
)
(110,748
)
Deferred compensation for stock options issued
—
(3,885
)
Accumulated other comprehensive income from interest rate swap
(16,769
)
—
6,356,788
4,968,811
$
31,229,782
$
25,929,594
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
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