Fountain Powerboats Reports Net Profit of $0.02 per Share for the First Quarter of Fiscal 2009

• Press Release
• Source: Fountain Powerboat Industries
• On Friday November 14, 2008, 10:00 am EST

WASHINGTON, NC--(MARKET WIRE)--Nov 14, 2008 -- Fountain Powerboat Industries, Inc. (AMEX:FPB - News), a leading manufacturer of high performance sport boats, fish boats and express cruisers, today announced the results of its fiscal 2009 first quarter, ended September 30, 2008.

Related Quotes Symbol Price Change FPB 0.33 0.00 {"s" : "fpb","k" : "c10,l10,p20,t10","o" : "","j" : ""}

Net Sales

Net sales for the first quarter were $17.6 million, compared to sales of $18 million for the first quarter of fiscal 2008.

"The continued decline in the domestic marine market is due to economic conditions and tightening credit availability, with the international market showing signs of weakening," stated Fountain's founder and CEO Reginald M. Fountain, Jr. "We are pleased that the first quarter results are comparable to last year's first quarter, but expect the remainder of the year to be challenging. We are reducing costs in anticipation of the continued decline in the economy."

Operating Profit

Operating profit for the first quarter of fiscal 2009 was $349,543, versus an operating profit of $638,470 for the first quarter of fiscal 2008.

Net Profit

Net profit for the first quarter of fiscal 2009 was $81,769, or net earnings per share of $0.02 on a basic and diluted basis, versus a net profit of $273,340, or net profit per share of $0.06 on a basic and diluted basis, for the first quarter of fiscal 2008.

About Fountain Powerboats, Inc.

Fountain Powerboats, Inc., a subsidiary of Fountain Powerboat Industries, Inc., 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. The potential risks and uncertainties, include, but are not limited to, the cyclical nature of the marine industry and current adverse conditions in the industry, higher than expected costs to build boats, lower than expected future market demand for boats, the volatile and competitive nature of the industry, the concentration of a substantial percentage of the Company's sales with a few major dealers, 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, and changes in domestic and international market conditions and foreign exchange rates. We assume no obligation to update any forward-looking statements to reflect events or circumstances arising after the date hereof. 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 SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


                                                September 30,   June 30,
                                                    2008          2008
                                                ------------  ------------
ASSETS

CURRENT ASSETS:
      Cash and cash equivalents                 $    925,885  $  1,445,270
      Restricted cash and cash equivalents           783,595            --
      Accounts receivable, net                     3,831,056     4,283,791
      Inventories                                  6,023,213     7,942,384
      Prepaid expenses                               811,282       631,108
                                                ------------  ------------
         Total Current Assets                     12,375,031    14,302,553

Property, Plant & Equipment                       55,128,484    54,777,765
    Less: Accumulated Depreciation               (36,091,516)  (35,455,637)
                                                ------------  ------------
                                                  19,036,968    19,322,128

CASH SURRENDER VALUE LIFE INSURANCE                3,439,083     3,374,413
OTHER ASSETS                                         330,131       325,566
                                                ------------  ------------
TOTAL ASSETS                                    $ 35,181,213  $ 37,324,660
                                                ============  ============



            FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARIES
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


                                                September 30,   June 30,
                                                    2008          2008
                                                ------------  ------------
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Current maturities - long-term debt         $    822,865  $    809,738
    Notes payable                                    137,050     3,075,606
    Accounts payable                               3,313,301     4,791,853
    Accrued expenses and other liabilities         1,208,241     1,264,079
    Dealer incentives                              5,860,389     5,618,766
    Customer deposits                                850,000       304,999
    Allowance for boat repurchases                   128,524        78,787
    Warranty reserve                                 769,147       860,199
                                                ------------  ------------
      Total Current Liabilities                   13,089,517    16,804,027

LONG-TERM DEBT, less current maturities           21,931,715    20,428,948
OTHER LONG-TERM LIABILITIES                               --         4,828
                                                ------------  ------------
      Total Liabilities                           35,021,232    37,237,803

STOCKHOLDERS' EQUITY
    Common stock, $.01 par value, 200,000,000
     shares authorized, 4,844,275 shares issued
     and as of September 30, 2008 and June 30,
     2008                                             48,442        48,442
    Additional paid-in capital                    10,574,753    10,574,753
    Accumulated deficit                           (9,123,060)   (9,204,829)
    Less: Treasury stock, at cost, 483,091
     shares                                         (981,223)     (981,223)
    Accumulated other comprehensive (loss) from
     interest rate swap                             (358,931)     (350,286)
                                                ------------  ------------
      Total Stockholders' Equity                     159,981        86,857
                                                ------------  ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $ 35,181,213  $ 37,324,660
                                                ============  ============



              FOUNTAIN POWERBOAT INDUSTRIES, INC. AND SUBSIDIARIES
           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                For the Three Months Ended
                                                ---------------------------
                                               September 30,  September 30,
                                                    2008          2007
                                                ------------- ------------
NET SALES                                       $  17,588,040 $ 18,049,430
COST OF SALES                                      15,369,721   15,344,844
                                                ------------- ------------
    Gross Profit                                    2,218,319    2,704,586
                                                ------------- ------------
EXPENSES:
    Selling expenses                                1,053,958    1,230,167
    General and administrative expenses               814,818      835,949
                                                ------------- ------------
    Total Expenses                                  1,868,776    2,066,116
                                                ------------- ------------
OPERATING INCOME                                      349,543      638,470
                                                ------------- ------------
NON-OPERATING INCOME (EXPENSE):
    Other income (expense)                             21,458     (101,722)
    Interest (expense)                               (289,232)    (263,368)
                                                ------------- ------------
      Total Non-operating (expense)                  (267,774)    (365,090)
                                                ------------- ------------
INCOME BEFORE INCOME TAXES                             81,769      273,380
INCOME TAX EXPENSE                                         --           40
                                                ------------- ------------
NET INCOME                                      $      81,769 $    273,340
                                                ============= ============
BASIC EARNINGS PER SHARE                        $         .02 $        .06
                                                ============= ============
WEIGHTED AVERAGE SHARES OUTSTANDING                 4,361,184    4,844,275
                                                ============= ============
DILUTED EARNINGS PER SHARE                      $         .02 $        .06
                                                ============= ============
WEIGHTED AVERAGE SHARES OUTSTANDING ASSUMING
 DILUTION                                           4,361,184    4,848,461
                                                ============= ============

     For Additional Information:
     Irving Smith
     Chief Financial Officer
     Fountain Powerboat Industries, Inc.
     252.975.7004
     ismith@fountainpowerboats.com