Offshoreonly.com - Fountain Fiscal 2008 reports

Fountain Powerboats Reports Fiscal 2008 Sales of $68.2 Million

WASHINGTON, NC -- (MARKET WIRE) -- 09/29/08 --

Fountain Powerboat Industries, Inc. (AMEX: FPB), a leading manufacturer

of high performance fish boats, express cruisers and sport boats, today

announced results for its fiscal year ended June 30, 2008.

Net Sales

Net sales for the fourth quarter of Fiscal 2008 were $20,734,513, compared

to net sales of $19,907,661 for the fourth quarter of Fiscal 2007.

Net sales for Fiscal 2008 were $68,202,620, compared to net sales of

$68,829,987 for Fiscal 2007.

"The decline in sales of the fiberglass recreational boat market has

affected the segments of the market in which Fountain's boats are sold for

the past two years," commented Fountain's Chief Financial Officer, Irving

L. Smith. "Maintaining approximately the same level of revenue in this

declining market was primarily the result of focused sales activities and

promotions guided by specific goals and objectives."

"We are maintaining market share in the sport boat segment, and

experienced improvement in the express cruiser segment in Fiscal 2008,"

said Fountain's Chairman, CEO and President, Reginald M. Fountain, Jr.

"The international market continues to grow, while the domestic market

declines, and our international sales increased by 28 percent in Fiscal

2008. We expect the Baja by Fountain product line to be a positive

contributor to our revenue in Fiscal 2009," added Fountain.

Gross Profit

Gross profit for the fourth quarter of Fiscal 2008 was $3,380,523, with a

gross profit margin of approximately 16.3 percent, versus a gross profit

of $3,749,583, with a gross profit margin of approximately 18.8 percent,

for the fourth quarter of Fiscal 2007.

Gross profit for Fiscal 2008 was $9,402,572, with a gross profit margin of

approximately 13.8 percent, versus a gross profit of $9,108,088, with a

gross profit margin of approximately 13.2 percent, for Fiscal 2007.

Net Profit/(Loss)

Net income for the fourth quarter of Fiscal 2008 was $258,305, or net

earnings per share of $0.07 on a basic and diluted basis, versus net

income of $535,059, or net earnings per share of $0.11 on a basic basis

and diluted basis, for the fourth quarter of Fiscal 2007.

Net loss for Fiscal 2008 was ($2,199,828), or a net loss per share of

($0.48) on a basic and diluted basis, versus net loss of ($5,046,286), or

net loss per share of ($1.05) on a basic and diluted basis, for Fiscal

2007.

The net loss for Fiscal 2007 was affected by the Deferred Tax Expense,

which was approximately $1.3 million for the year.

About Fountain Powerboat Industries

Fountain Powerboat Industries has its executive offices and manufacturing

facilities along the Pamlico River in Beaufort County, North Carolina. The

company designs, manufactures and sells offshore sport boats, sport

fishing boats and express cruisers that target the segment of the

recreational power boat market where speed, performance, safety and

quality are the main criteria for purchase. These recreational boats are

based upon an innovative, award-winning design enabling world class

performance while using standard reliable power. There are currently 12

buildings located on 65 acres totaling over 237,000 square feet

accommodating 40 to 45 boats in various stages of construction at any one

time. The present plant site can also accommodate up to 300,000 square

feet of additional manufacturing space. The land and buildings are wholly

owned by Fountain Powerboat Industries, Inc. and its subsidiary, Fountain

Powerboats, Inc. For more information, visit www.fountainpowerboats.com.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS:

Except for the historical information contained herein, this press release

contains forward-looking statements, including statements containing the

words "planned," "expects," "believes," "strategy," "opportunity,"

"anticipates" and similar words. Such forward-looking statements are

subject to known and unknown risks, uncertainties or other factors that

may cause the company's actual results to be materially different from

historical results or any results expressed or implied by such

forward-looking statements. We assume no obligation to update any

forward-looking statements to reflect events or circumstances arising

after the date hereof. The potential risks and uncertainties which could

cause actual growth and results to differ materially include, but are not

limited to, customer acceptance of the company's services, products and

fee structures, the success of the company's brand development efforts,

the volatile and competitive nature of the industry, and changes in

domestic and international market conditions, and foreign exchange rates.

Further information on the factors and risks that could affect Fountain

Powerboat Industries, Inc.'s business, financial condition and results of

operations are included under the "Risk Factors" or "Factors Affecting

Our Operating Results" sections of Fountain Powerboat Industries, Inc.

public filings with the Securities and Exchange Commission, available

at(http://www.sec.gov).

FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2008 AND 2007
ASSETS
2008 2007
------------- --------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,445,270 $ 2,379,383
Accounts receivable, net 4,283,791 3,688,986
Inventories 7,942,384 6,645,213
Prepaid expenses 631,108 668,237
Deferred tax assets -- --
------------- --------------
Total Current Assets 14,302,553 13,381,819
PROPERTY, PLANT AND EQUIPMENT 54,777,765 49,533,443
Less: Accumulated depreciation (35,455,637) (33,104,217)
------------- --------------
19,322,128 16,429,226
CASH SURRENDER VALUE LIFE INSURANCE, NET 3,374,413 2,951,010
OTHER ASSETS 654,890 654,890
------------- --------------
TOTAL ASSETS $ 37,324,660 $ 33,416,945
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
2008 2007
------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 809,738 $ 759,290
Note payable 3,075,606 799,333
Accounts payable 4,791,853 2,846,303
Accrued expenses 1,264,079 1,092,908
Dealer incentives 5,618,766 6,342,467
Customer deposits 304,999 879,102
Allowance for boat repurchases 78,787 64,124
Warranty reserve 860,199 941,928
------------- --------------
Total Current Liabilities 16,804,027 13,725,455
OTHER LONG TERM LIABILITIES 4,828 4,828
LONG-TERM DEBT, less current portion 20,428,948 15,969,407
DEFERRED TAX LIABILITY -- 80,896
Total Liabilities 37,237,803 29,780,586
------------- --------------
COMMITMENTS AND CONTINGENCIES [NOTE 8]
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 200,000,000
shares authorized, 4,844,275 shares
issued and outstanding as of June 30,
2008 and June 30, 2007 48,442 48,442
Additional paid-in capital 10,574,753 10,574,753
Accumulated deficit (9,204,829) (7,005,001)
Less: Treasury stock, at cost, 483,091
shares (981,223) (110,748)
Accumulated other comprehensive income
from interest rate swap (350,286) 128,913
------------- --------------
Total Stockholders' Equity 86,857 3,636,359
------------- --------------
Total Liabilities and Stockholders'
Equity $ 37,324,660 $ 33,416,945
FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2008, 2007 AND 2006
2008 2007 2006
------------ ------------ -------------
NET SALES $ 68,202,620 $ 68,829,987 $ 79,226,224
COST OF SALES 58,800,048 59,721,899 66,152,424
------------ ------------ -------------
Gross Profit 9,402,572 9,108,088 13,073,800
------------ ------------ -------------
EXPENSES
Selling Expense 6,704,422 8,040,083 6,765,871
General and Administrative 3,799,460 3,813,883 4,032,574
------------ ------------ -------------
Total Expense 10,503,882 11,853,966 10,798,445
------------ ------------ -------------
OPERATING (LOSS) INCOME (1,101,310) (2,745,878) 2,275,355
------------ ------------ -------------
Other Expense 125,593 49,855 9,944
Interest Expense 976,853 966,784 1,132,584
(Gain) loss on disposal of assets (3,928) 41 11,661
------------ ------------ -------------
TOTAL NON-OPERATING EXPENSE 1,098,518 1,016,680 1,154,189
------------ ------------ -------------
(LOSS) INCOME BEFORE INCOME TAXES (2,199,828) (3,762,558) 1,121,166
TAX PROVISION (BENEFIT) - 1,283,728 (1,283,746)
------------ ------------ -------------
NET (LOSS) INCOME $ (2,199,828) $ (5,046,286) $ 2,404,912
============ ============ =============
BASIC (LOSS) EARNINGS PER SHARE $ (.48) $ (1.05) $ .50
============ ============ =============
WEIGHTED AVERAGE SHARES
OUTSTANDING 4,587,193 4,821,987 4,819,275
============ ============ =============
DILUTED (LOSS) EARNINGS PER
SHARE $ (.48) $ (1.05) $ .49
============ ============ =============
DILUTED WEIGHTED AVERAGE SHARES
OUTSTANDING 4,587,193 4,821,987 4,903,949 For Additional Information:

Irving Smith

Fountain Powerboat Industries, Inc.

252.975.7004

[email protected]