"And now for something completely different."
 

DOW JONES NEWSWIRES

Fountain Powerboat Industries Inc.'s (FPB) third-quarter earnings were significantly lower and gross profit fell more than 4%, though net sales for the period were up about 11%.

The Washington company, which makes high performance boats, posted third-quarter earnings of $22,410 or nil a share, down from $360,460 or 7 cents a year earlier.

Net sales for the quarter rose to $18.5 million from $16.7 million. Gross profit fell to $2.8 million from $2.9 million.

The company said "we are not pleased with the gross profit or net income for the third quarter." It said it has hired an industry consultant to help implement "Lean Manufacturing" techniques, which have helped management and employees enhance processes in the manufacturing facility and implement best business practices.

Fountain said it expects revenue for the year ending June 30 of $77-$78 million, with net income of $1.2-$1.4 million or 25-29 cents a share.

-Judy McKinnon; 416-306-2100; [email protected]

Order free Annual Report for Fountain Powerboat Industries




....Ahh... the high cost of SBI sponsorship.

T2x

Re: "And now for something completely different."
 

18 million of sales with a profit of 22K for the quarter.....WOW :eek: :eek:


I would think of alot of easier ways to make $88K a year than making all of those boats!!!!! :D :evilb: :drink: :evilb:

Re: "And now for something completely different."
 

One more thing. I could swear that there was a press release that they (Fountain) sold 17 Million worth of boats at the Miami boat show in Feb.

What did they do, take the rest of the quarter off???? :rolleyes:

Re: "And now for something completely different."
 

Yeah,
They must have some MASSIVE Overhead $$?! :eek:
Dean

Re: "And now for something completely different."
 

When you have to hire a consultant to tell you whats wrong with the business you work and run every day....your not in a good place :cool:
:chimp:

Re: "And now for something completely different."
 

:rolleyes: Ya, that'll solve all their woes.

Re: "And now for something completely different."
 

What a great Statement ,,, I have always said that!!! How can some one else tell you ,, the owner and creator) how to make money with your own business!!! :rolleyes:

RHC

Re: "And now for something completely different."
 

They must have a ton of debt. I think I read somewhere a while back that the Mercury deal when they bought half (or whatever) of Fountain included a big loan and an option for Mercury to buy the company outright in the future.

Re: "And now for something completely different."
 

Is this a typo???? gotta be???

Re: "And now for something completely different."
 

They just need to add some beak and platform and market the boats as a foot or two longer than they are ..problem solved :drink:

Re: "And now for something completely different."
 

Form 10-Q for FOUNTAIN POWERBOAT INDUSTRIES INC

11-May-2006

Quarterly Report


ITEM 2: Management's Discussion and Analysis of Results of Operations and Financial Condition

Results of Operations

Net Sales - Net sales for the three months ended March 31, 2006 were $18,526,332, an increase of $1,812,192 or 11%, as compared to net sales of $16,714,140 for the three months ended March 31, 2005. Net sales for the nine months ended March 31, 2006 were $55,894,161, an increase of $5,181,194 or 10%, as compared to net sales of $50,712,967 for the nine months ended March 31, 2005. The increase in net sales from the comparable periods during the previous fiscal year was primarily attributable to increased unit sales of our larger fish boats including the new 33 foot sport fish cruiser, and increased production of express cruisers.

Gross Profit - Gross profit for the three months ended March 31, 2006 was $2,764,533 as compared to $2,891,593 for the three months ended March 31, 2005. Gross profit for the third quarter was affected in part by a special pricing program to expand the Company's presence in a segment of the sport boat market and management's decision to not ship 38' cruisers to dealers during a major redesign of the boat. The redesigned 38' cruisers are expected to begin shipment in the fourth quarter. Gross profit for the nine months ended March 31, 2006 was $9,338,349, an increase of $2,077,705, or 29%, as compared to $7,260,644 for the nine months ended March 31, 2005. The increase in gross profit for the nine months ended March 31, 2006, as compared to the comparable periods in the previous year is primarily attributable to improvements in the productivity and efficiency of the Company's manufacturing operations and increased production of express cruisers

Selling Expenses - Selling expenses for the three months ended March 31, 2006 were $1,484,647 as compared to $1,459,364 for the three months ended March 31, 2005. Selling expenses for the nine months ended March 31, 2006 were $4,211,356 as compared to $3,994,954 for the nine months ended March 31, 2005; the increase in expenses for the nine months is primarily attributable to increases in advertising and dealer training expenses.

General and Administrative Expenses - General and administrative expenses for the three months ended March 31, 2006 were $1,063,484 as compared to $824,396 for the three months ended March 31, 2005; the increase in expenses for the third quarter is primarily attributable to increases in salaries and consulting and services expenses. General and administrative expenses for the nine months ended March 31, 2006 were $3,034,937, an increase of $681,465, as compared to $2,353,472 for the nine months ended March 31, 2005; the increase in expenses for the nine month period was generally related to accounting and legal expenses related to the restatements of the Company's consolidated financial statements for the year ended June 30, 2004 and the quarterly and year-to-date periods ended September 30, December 31 and March 31, 2005, preparation for internal audit processes as required by the Sarbanes-Oxley Act: Section 404, fees for management consulting, and expenses related to an increased emphasis on investor awareness programs.

Interest Expense -Interest expense during the three months ended March 31, 2006 was $219,421, as compared to $252,308 for the three months ended March 31, 2005. Interest expense during the nine months ended March 31, 2006 was $1,027,621 as compared to $793,417 for the nine months ended March 31, 2005. The increase in interest expense was principally due to the write-off of deferred closing costs of $229,801 relating to the Bank of America loan that was refinanced during the period.

Net Income (Loss) - Net income for the three months ended March 31, 2006 was $22,410 as compared to $360,460 for the three months ended March 31, 2005. Net income for the nine months ended March 31, 2006 was $1,038,764 as compared to $124,528 for the nine months ended March 31, 2005.

Income Tax - Current tax expense is $0 and $0 for the three and nine months ended March 31, 2006 and 2005, respectively. Deferred tax expense is $0 and $0 for the three and nine months ended March 31, 2006 and 2005, respectively. The Company provided no income tax expense for the three and nine months ended March 31, 2006, even though the Company had income before income taxes, due to the recognition of deferred tax assets generated in prior years. Due to the volatility of the Company's operating results in recent years past, the net deferred tax asset at March 31, 2006 continues to be reduced to $0 through a valuation allowance.

Liquidity and Capital Resources

Cash was $2,280,394 and $4,013,225 at March 31, 2006 and June 30, 2005, respectively. The decrease of $1,732,831 in cash is primarily attributable to investing activities as discussed below.

Cash provided by operations for the nine months ended March 31, 2006 was $133,018 and cash provided by operations for the nine months ended March 31, 2005 was $4,055,989. The cash provided by operations during the nine month period ending March 31, 2006 is primarily attributable to Operating Activities ($2,991,594) and an increase in Dealer Incentives ($2,030,840), partially offset by uses of cash attributable to increases in Accounts Receivable ($1,939,063), Inventories ($1,420,358) and Prepaid Expenses ($966,186).

Cash used by investing activities for the nine months ended March 31, 2006 was $1,687,818 and for the nine months ending March 31, 2005 was $3,147,964. The use of cash during the nine months ended March 31, 2006 was primarily attributable to boat mold and tooling expenditures ($786,875) to support the Company's continued enhancement of its product lines and purchases of other property, plant and equipment ($728,347).

Cash used by financing activities for the nine months ended March 31, 2006 was $178,031 and cash used by financing activities for the nine months ended March 31, 2005 was $2,214,489. The use of cash during the nine months ended March 31, 2006 is solely attributable to the refinancing and repayment of long-term debt.

Management is of the opinion that cash flows will be sufficient to satisfy its current and future liquidity demands because of the increase in sales volumes at the date of this filing. The Company has maintained a substantial sales backlog through the date of this report and is currently enjoying a favorable business climate for its products. The Company's firm order backlog at March 31, 2006 was $49 million, as compared to $45 million at March31, 2005.

Cautionary Statement for Purposes of "Safe Harbor" Under the Private Securities Reform Act of 1995.

The Company may from time to time make forward-looking statements, including statements projecting, forecasting, or estimating the Company's performance and industry trends. The achievement of the projections, forecasts, or estimates contained in these statements is subject to certain risks and uncertainties, and actual results and events may differ materially from those projected, forecasted, or estimated.

The applicable risks and uncertainties include general economic and industry conditions that affect all businesses, as well as, matters that are specific to the Company and the markets it serves. For example, the achievement of projections, forecasts, or estimates contained in the Company's forward-looking statements may be impacted by national and international economic conditions; compliance with governmental laws and regulations; accidents and acts of God; and all of the general risks associated with doing business.

Risks that are specific to the Company and its markets include but are not limited to compliance with increasingly stringent environmental laws and regulations; the cyclical nature of the industry; competition in pricing and new product development from larger companies with substantial resources; the concentration of a substantial percentage of the Company's sales with a few major customers, the loss of, or change in demand from, any of which could have a material impact upon the Company; labor relations at the Company and at its customers and suppliers; and the Company's single-source supply and just-in-time inventory strategies for some critical boat components, including high performance engines, which could adversely affect production if a single-source supplier is unable for any reason to meet the Company's requirements on a timely basis.

Re: "And now for something completely different."
 

Looks like a nosedive. :(

Re: "And now for something completely different."
 

That's the problem with being a public company....

When things are good they are OK. When they're bad, everyone airs their dirty laundry! :eek:

Re: "And now for something completely different."
 

Gas prices . :(

Re: "And now for something completely different."
 

Gross profit for the third quarter was affected in part by a special pricing program to expand the Company's presence in a segment of the sport boat market and management's decision to not ship 38' cruisers to dealers during a major redesign of the boat. The redesigned 38' cruisers are expected to begin shipment in the fourth quarter. Gross profit for the nine months ended March 31, 2006 was $9,338,349, an increase of $2,077,705, or 29%, as compared to $7,260,644 for the nine months ended March 31, 2005. The increase in gross profit for the nine months ended March 31, 2006, as compared to the comparable periods in the previous year is primarily attributable to improvements in the productivity and efficiency of the Company's manufacturing operations and increased production of express cruisers

Re: "And now for something completely different."
 

[QUOTE]Ahh... the high cost of SBI sponsorship :eek:

Re: "And now for something completely different."
 

[QUOTE=Pete B]sponsorship or ownership? :D

Re: "And now for something completely different."
 

It's the new step bottom.

Re: "And now for something completely different."
 

That's probably after Reggie's salary!! :D

Re: "And now for something completely different."
 

Those numbers don't look good. :eek:

Re: "And now for something completely different."
 

oK, so sometimes people dont agree with your humor,, but that one was pretty dayum funny :eek: :drink:

Re: "And now for something completely different."
 

My buddy Bill and I were in Don Aronow's office about a month before Don died. Don asked Bill how car business sales were, to which Bill responded, "Great, how are sales in the boat building business, Don?" Don said, "In this business, you don't make money building and selling boats, you make money selling boat building COMPANIES."

Sounds even more profound now doesn't it?

Re: "And now for something completely different."
 

It is very interesting that Brunswick Corporation has been buying boat companies at a rate of at least 4 per year. In the case of Fountain where they have had some form of vested interest for 4 years or so, they have decided to stay with this relationship and not buy up Fountain. Assuming they have some form of right to purchase they have chosen not to exercise it, probably based on the relatively low profitability of the company.

Re: "And now for something completely different."
 

Yes, I would assume they did their due diligence and decided against the purchase. Now they're waiting for the company to be diluted so they can exercise their option to buy at a bargain. :evilb: