Fountain reports dramatic losses
Published 1:12 am Tuesday, February 3, 2009
Company had loss per share of 73 cents for quarter
By GREG KATSKI
Fountain Powerboats Industries Inc. reported substantial losses in its most recent quarterly report.
The parent company of Fountain Powerboats filed its December 2008 report with the Securities and Exchange Commission on Monday, reporting a comprehensive loss of more than $3.5 million for the quarter.
The quarterly report came one business day after the company reported it was being delisted from the New York Stock Exchange Alternext US stock exchange.
During the three-month period that ended Dec. 31, 2008, the company had a basic loss per share of 73 cents, compared to a loss per share of 16 cents for the same quarter in 2007.
The losses can be attributed to the effects of the global economic downturn on the power boat market, said the report to the SEC.
Net sales for the quarter totaled just short of $6 million, compared to more than $15 million for the same quarter last year.
Recently acquired Baja by Fountain boats comprised 31 percent of the company’s net sales. Fountain Powerboats acquired Baja from rival power boat manufacturer Brunswick in spring 2008.
Despite the dismal quarterly numbers, Fountain found the silver lining in the report.
The company reported a net profit of 2 cents per share for the quarter that ended Sept. 30, 2008.
Included in the most recent report was a statement by the company addressing its ability to continue as a going concern. An audit report for the 2007-2008 fiscal year by accounting firm Gregory &Associates LLC raised substantial doubt about the company’s ability to do so.
In the December 2008 report, Fountain Powerboats stated “management believes such a concern may be alleviated by current plans and initiatives which are directed towards stabilizing the operation until the economy and marine market recover to a more stable level.”
Among the company’s plans are more reductions in marketing, sales and administrative staffs, curtailing production schedules, reducing the production work force and a significantly reducing operating expenses.
Fountain Powerboats has already reduced its work force and curtailed production schedules significantly, Fountain said.
The company’s operating loss for the quarter was $2,860,691.