WASHINGTON, N.C. - Boat builder Fountain Powerboats, Inc. (NasdaqSC: FPWR) recorded a net loss for the second quarter of fiscal 2005, ending December 31, 2004, the company reported in a statement today.
The net loss was ($43,743), or a net loss per share of ($0.01) on a basic and diluted basis, compared to net income of $239,059 for the second quarter of fiscal 2004, or earnings per share of $0.05.
The net loss was due primarily to the restructuring of the factory's process flow and increased costs of petroleum-based products used in the manufacturing process, the rising cost of nickel, and significant increases in transportation costs, according to Fountain Chief Financial Officer Irving Smith.
"Over the past several months, manufacturing processes have been streamlined to enhance production flow and efficiency, improve the manufacturing process and increase capacity," said Smith. "These improvements, along with passing on increased materials and transportation costs via competitive price increases, have already improved the gross margin percentage for January by 33 percent when compared to the gross margin percentage for our fiscal second quarter ended December 31, 2004. We expect to significantly improve gross profit margins during the second six months of fiscal 2005."
Net sales for the quarter were $17,451,992, up from sales of $13,361,811 for the second quarter of fiscal 2004, a 31-percent increase. The company reported an operating profit of $250,548 for the quarter compared to an operating profit of $457,053 for the second quarter of fiscal 2004.
Net sales for the first six months of fiscal 2005 ended December 31, 2004 were $34,255,901, compared to net sales of $26,247,043 for the first six months of fiscal 2004, a 31-percent increase. Operating income for the first six months of fiscal 2005 was $759,688 compared to $567,805 for the first six months of fiscal 2004. Net income for the first six months of fiscal 2005 was $270,182, or earnings per share of $0.06 on a basic and diluted basis, compared to a net loss of $(117,288) for the first six months of fiscal 2004, or a net loss per share of $(0.02) on a basic and diluted basis.
The company's balance sheet remains strong with $3.3 million in cash and cash equivalents, a current ratio of 1.60:1 and shareholders' equity of approximately $6.6 million, according to Fountain.
"We are once again pleased to announce record revenue growth for the quarter," commented Fountain Powerboats Chief Executive Officer and President Reginald M. Fountain, Jr. "We have just spent more than a half million dollars restructuring and enhancing our manufacturing operation to improve our productivity and increase our capacity. I am pleased to say that we have the order backlog and capacity to meet our projections of $67 million in sales for fiscal 2005."
The CEO also said that the Fort Lauderdale International Boat Show and New York National Boat Show produced record sales of $8 million.
“We are currently preparing for the Miami Boat Show, generally our most successful show of the boating season, with the unveiling of four new boats, a 42-foot Poker Run Edition Sport Boat, a 33-foot Sport Fish Cruiser, a 32-foot Center Console Fish Boat and a 23-foot Center Console Fish Boat,” he added.
Fountain Powerboats, Inc. is a subsidiary of Fountain Powerboat Industries, Inc. and manufacturer of high performance sport boats, fish boats and express cruisers.
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