WASHINGTON, N.C. – Although Fountain Powerboat Industries, Inc. reported a 13.7 percent drop in net sales for the third quarter of fiscal 2008, the company is only down 3 percent for the nine-month period ended March 31, 2008, Fountain said in a press release today.
Net sales for the 2008 third quarter were $14.2 million. Fountain attributed the continued weak retail market for the 13.7 percent drop over the same period last year. Net sales for the first nine months of the fiscal year were $47.5 million.
“Sales for the quarter reflect continuing demand for our larger sport and fish boats, as well as our express cruiser line,” said Reginald M. Fountain, Jr., chairman and CEO. “While international sales have increased by approximately 48 percent, domestic sales of our smaller sport boats and fish boats have declined as the target market for the products is being significantly affected by increasing fuel and food prices, the mortgage crisis and loss of consumer confidence in the economy.”
“We continue to introduce new and improved products as we implement production efficiencies and reduce expenses in response to our lower production expectations,” said David Knight, president. “We are carefully managing our dealer inventory, which at 31 weeks of production, is at a five-year low.”
Gross profit was $6.0 million for the first nine months of fiscal 2008. Fountain posted a 12.7 percent gross profit margin, versus a gross profit margin of 11 percent, for the first nine months of fiscal 2007. The improvement in gross margin is primarily attributable to improved manufacturing efficiencies and increased selling prices, the company said.
Gross profit for the quarter was $1.1 million, with a gross profit margin of approximately 7.7 percent, versus a gross profit margin of 8.3 percent, for the third quarter of fiscal 2007. Fountain attributed the decrease to reduced fixed absorption because of lower sales volume.
Fountain’s operating loss for the nine-month period was $1.5 million, an improvement over the $3.4 million operating loss for the first nine months of fiscal 2007. Operating loss for the third quarter was $1.7 million, compared with a $1.3 million operating loss for the same period last year.
The company reported a net loss for the first nine months of fiscal 2008 of $2.5 million. Net loss for the same period in 2007 was $5.6 million. Net loss for the quarter was $2.0 million versus a net loss of $3.9 million for the third quarter of fiscal 2007. The third quarter of the prior year included a deferred tax expense.
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