Featherlite Inc. reported record net income of $1.5 million on net sales of $54.1 million for the second quarter ended June 30.
The Cresco, Iowa-based manufacturer and marketer of specialty aluminum trailers, transporters and luxury motorcoaches, released the glowing report Tuesday (Aug. 1), just five days after announcing it would merge with Universal Trailer and spin off its luxury coach division.
Higher second quarter net income was primarily the result of increased sales and gross margin improvements in the trailer division compared to 2005, the company explained. Net income for the first six months of 2006 was $2.9 million compared with $2.5 million for the same period in 2005.
Second quarter net sales in 2006 rose by $2.0 million, or 3.8 percent, over the same period last year.
Luxury coach segment sales decreased by 37.6 percent in the second quarter over the same quarter last year with unit sales down in both new and pre-owned coaches. Declines in coach unit sales were partially offset by higher net revenues per unit sold in both new and pre-owned categories.
Trailer segment sales increased 25 percent in the second quarter of 2006 over the same period last year. This increase resulted from greater trailer unit sales in nearly all product categories as well as a significant improvement in average revenue per unit as a result of the favorable impact of the price increases and surcharges initiated in 2006 to offset commodity price increases.
Net sales of $114.5 for the first six months of 2006 were up 3 percent from $110.7 million reported in the same period last year as increased trailers sales of 14.8 percent were substantially offset by a 17.5 percent decrease in motorcoach sales.
“Despite softness in the luxury coach segment, Featherlite posted its strongest second quarter earnings ever,” said Conrad Clement, president and CEO. “We remain cautiously optimistic about sales through the remainder of 2006. Though the trailer segment backlog is at $14.2 million compared with $16.3 million at the same period last year, we are pleased that order levels have remained strong throughout 2006.
Motorcoach segment backlog has declined from $9.2 million at June 30, 2005, to $2.3 million at Dec. 31, 2005, and $1.7 million at June 30, 2006. “We expect demand for coaches in the third and fourth quarters of 2006 to improve as uncertainties related to company’s process of exploring strategic alternatives have been removed,” he said, alluding to last week’s merger announcement.
The company recently launched the Featherlite Vantaré Platinum Plus, touting it as the most luxurious in the industry. The early media attention has been the strongest of any the company has received for a coach product launch, and it looks forward to introducing it to audiences first hand at shows and events this summer, fall and beyond, Clement said.