Fountain Powerboats reports 13-percent sales decline

WASHINGTON, N.C. – Fountain Powerboat Industries, Inc. (AMEX:FPB), a manufacturer of high performance fish boats, express cruisers and sport boats, saw its sales and profits decline significantly in the 2007 fiscal year ended June 30, it reported in a recent statement.

Net sales for the fourth quarter of fiscal 2007 were $19,907,661, a 14.7-percent decrease, when compared to net sales of $23,332,064 for the fourth quarter of fiscal 2006. Net sales for fiscal 2007 were $68,829,987, a 13-percent decrease, when compared to net sales of $79,226,224 for fiscal 2006.

“The decrease in sales for the year was due to an overall softening of the marine industry,” commented Fountain Chief Financial Officer Irving L. Smith. “Boat purchasing decisions are influenced by interest rates, fuel prices, insurance rates, weather, as well as socioeconomic and environmental factors, all of which negatively affected consumer confidence and discretionary spending.”

“While dealer inventories of Fountain boats are at a four-year low, the results of the late summer boat shows have been encouraging,” said Fountain Chairman and CEO Reginald M. Fountain, Jr. “We are maintaining market share in the sport boat segment and experienced improvement in the express cruiser segment in the latter half of fiscal 2007. We expect sales for fiscal 2008 to be at approximately the same level as 2007.”

Gross profit for the fourth quarter of fiscal 2007 was $3,749,583, with a gross profit margin of approximately 18.8 percent, versus a gross profit of $3,735,452, with a gross profit margin of approximately 16 percent, for the fourth quarter of fiscal 2006.

Gross profit for fiscal 2007 was $9,108,088, with a gross profit margin of approximately 13.2 percent, versus a gross profit of $13,073,800, with a gross profit margin of approximately 16.5 percent, for fiscal 2006.

“The decline in gross profit margins for fiscal 2007 is attributed to inefficiencies due to lower production volumes, reduced fixed-cost absorption from production cuts, and promotional program pricing in the first half of the year,” remarked Smith.

Net profit for the fourth quarter of fiscal 2007 was $535,059 versus net income of $1,366,148 for the fourth quarter of fiscal 2006. Net loss for fiscal 2007 was $5,046,286 versus net income of $2,404,912 for fiscal 2006.

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