Sales up 20 percent for Fountain Powerboats

WASHINGTON, N.C. – Sales rose 20 percent during fiscal year 2005 for Fountain Powerboats, Inc., compared to 2004, the company reported in a release yesterday.

Net sales for fiscal year, ended June 30, were $71,182,069, compared to sales of $59,296,964 for fiscal 2004.

Fountain reported an operating profit of $1,766,347 for the year, compared to an operating profit of $1,830,080 for fiscal 2004. Net income for fiscal 2005 was $756,212, or net income per share of $0.16 on a basic basis and $0.15 on a diluted basis, compared to net income of $609,087, or earnings per share of $0.13 on a basic and diluted basis for fiscal 2004.

“The fourth quarter produced record revenue and record gross profit for the company,” said Irving Smith, Fountain’s chief financial officer. “The months of construction associated with the streamlining of our manufacturing facility, combined with the introduction of several new boat models and the integration of approximately 60 new manufacturing personnel, adversely affected productivity and gross profit margins for the first, second and part of the third quarter of fiscal 2005.

“With construction completed and new employees trained, the fourth quarter produced revenue of $20,469,099, with a gross profit of $3,649,919, and a gross profit margin of 18 percent. This compares to a gross profit of $1,993,148, or a gross profit margin of 12 percent, for the first quarter; $2,375,903, or 14 percent, for the second quarter; and $2,891,593, or 17 percent, for the third quarter. Operating income for the fourth quarter of fiscal 2005 was $854,130, with net income of $631,686, or net earnings per share of $0.13 on a basic and diluted basis, a significant improvement over the first three quarters of fiscal 2005.”

Fountain said its balance sheet remains strong, with $4 million in cash and cash equivalents and a current ratio of 1.22:1. Shareholders’ equity of was approximately $6.7 million, a 17 percent increase compared to fiscal 2004.

“The investment to streamline operations has positioned the company to meet its projected revenue of $80 million for fiscal 2006,” said Reginald M. Fountain, Jr. Fountain’s CEO and president, “We are entering fiscal 2006 with a strong backlog of approximately $52 million, which represents 255 boats, compared to a backlog of $39 million, or 206 boats, for fiscal 2005. While we are all concerned about rising fuel prices, hurricanes, rising interest rates and consumer confidence, the demand for our products within our target market continues to grow.

Fountain said the company is looking forward to success at the Ft. Lauderdale Boat Show, the New York Boat Show and the Miami Boat Show in February. Those three shows generated revenue of approximately $20 million for the company in fiscal 2005.

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