Featherlite Inc.
Address:
P.O. Box 320
Cresco, Iowa 52136
U.S.A.
Telephone: (319) 547-6000
Toll Free: 800-800-1230
Fax: (319) 547-6100
http://www.featherliteinc.com
Statistics:
Public Company
Incorporated:1988
Employees:1,737
Sales: $190.87 million (1998)
Stock Exchanges: NASDAQ
Ticker Symbol:FTHR
NAIC: 33621 Motor Vehicle Body & Trailer Manufacturing; 336212 Truck Trailer Manufacturing; 336214 Travel Trailer & Camper Manufacturing; 336211 Bus Bodies Manufacturing
Company Perspectives:
Headquartered in Cresco, Iowa, Featherlite is a leader in designing and manufacturing high-quality aluminum and specialty trailers.
Company History:
Featherlite Inc. is an innovative leader in the design, manufacture, and marketing of aluminum specialty trailers and luxury motorcoaches. Through a dealer network encompassing the United States and Canada, as well as other parts of the world, Featherlite offers more than 400 standard and custom-made trailers. The company, headquartered in Iowa, serves the horse, livestock, utility and cargo, drop deck and flatbed semi, snowmobile, car, and race car trailer/transporter markets.
Moving from Earth to Aluminum: 1988
In 1988 the Clement family acquired the assets of an El Reno, Oklahoma-based business that had been manufacturing trailers since the early 1970s under the Featherlite brand name. "I was in the farm and construction equipment business, the auction business and real estate for 20 years before that," said President and Chief Executive Officer Conrad Clement. "When my two sons, Tracy and Eric, and I bought the company in 1988, it had 72 employees and annual sales of under $20 million." The Clements immediately moved the business to Grand Meadow, Minnesota. At first, the company almost exclusively manufactured horse and livestock trailers, but soon decided to change the mix of its trailer business by diversifying its product lines and developing higher-end products. The sales of the company grew steadily with this diversification
These early years of the company were characterized by great expansion as well as diversification of the product line. When the Clements first took over, there were only two plants totaling 160,000 square feet of space. By 1992 the company had nearly doubled its manufacturing space with the addition of the Nashua, Iowa plant, and increased from 72 to 460 the number of workers employed.
Featherlite's next move quickly propelled them into the fast lane toward success. The company decided to expand its line to build car transporters. Conrad Clement looked at the racing industry and saw potential not only for attracting new customers but for enhancing the visibility of the company brand. Thus, he contacted Richard Childress and Dale Earnhardt, both well-known on the NASCAR circuit at the time, and struck a deal to build them new race car transporters. These first trailers were completed in 1992. Then the company built a third trailer for Richard Petty, whose family name was synonymous with professional racing. Clement was a master at involving the drivers in the development process to win their approval. Both Childress and Petty flew to the plant to oversee the designs, and Clement even enlisted Petty to conduct an autograph session with his employees.
Building on this success, Featherlite quickly established itself as a leader in innovative specialty trailer designs by building race car transporters and other types of specialty trailers for motor racing's biggest stars. Featherlite's customer list soon began to look like a virtual "Who's Who" of racing greats, including NASCAR Winston Cup champion Jeff Gordon; CART Champion Alex Zanardi; NHRA Funny Car champion John Force; NASCAR Busch Series champion Dale Earnhardt, Jr.; NASCAR Craftsman Truck Series points champion Jack Sprague; and World of Outlaws sprint car champion Steve Kinser.
Going Public, 1994
In 1993 the company moved its corporate headquarters to a new 50,000-square-foot facility in Cresco, Iowa, to be closer to its manufacturing plants at Cresco and Nashua. By this time, the company employed 530 workers in all its plants. In September of the following year, the company raised $10.4 million in new capital through an initial public offering of common stock. About $4.2 million went into the construction of a 140,000-square-foot manufacturing space in Cresco in anticipation of future growth. The company also quickly increased the number of its employees to 800. In addition, Featherlite signed an agreement with Polaris Industries in 1994 to produce private label snowmobile, ATV, and personal watercraft trailers.
Race car transporters continued to fuel the growth of the company. In 1995 the 100th race car transporter was built for famous race car driver A.J. Foyt. That same year, Featherlite built its third plant, adding 101,000 square feet to its manufacturing capacity, and also constructed an addition to its interiors facility, increasing its size by 40,000 square feet.
In October 1995, Featherlite acquired the assets of Diamond D Trailer Manufacturing, a nationally recognized steel trailer manufacturer in Shenandoah, Iowa, in order to provide customers and dealers with a high quality, but less expensive alternative to all-aluminum trailer models. The acquisition included Diamond's 117,000-square-foot facility and added 75 Diamond D dealers to Featherlite's distribution system, while further augmenting the workforce by 985 employees. The innovative leader in the steel trailer industry, Diamond D trailers were designed to insure maximum structural integrity and cosmetic longevity while maintaining affordability to discriminating consumers.
As the company continued to diversify its product line, it also gained in popularity. By 1996 the company had 1,030 employees on the payroll and could have coasted. Instead it raced ahead. In January 1996, Featherlite entered the luxury motorcoach market with the acquisition of the assets of Vantare International, Inc. of Sanford, Florida. The Vantare acquisition enlarged the company's total workforce to 1,150 employees and added another 52,000-square-foot facility to its manufacturing capacity. Featherlite fully integrated Vantare's new luxury motorcoach division into its operations, contributing approximately $35 million in revenues to the company. Very quickly, Featherlite became a leading manufacturer and marketer of luxury motorcoaches.
In 1997 Featherlite completed a 20,000-square-foot addition to the Vantare plant, constructed a 20,000-square-foot addition to its employee Work Center, and raised its workforce to 1,200. By that year, revenues had grown to over $135 million. In October 1997 the company signed a joint venture agreement with GMR Marketing to form Featherlite/GMR Sports Group, LLC. The goal of this joint venture was to develop promotional events and implement marketing strategies in the rapidly evolving motorsports industry. The company believed that a clearer marketing infrastructure was needed to support its growing brand name.
Having embraced the motorcoach line with the Vantare acquisition, Featherlite took a further step to secure its lead in the marketplace. The company reasoned that many of its established racing car transporter customers would also want luxury coaches. Consequently, in May 1998 Featherlite acquired the assets of Mitchell Companies, the manufacturer of Vogue luxury motorcoaches and bus conversion vehicles including its 90,000-square-foot manufacturing facility. Featherlite made changes in the Vogue line and introduced the 5000 Series (formerly the Vogue V) and Le Mirage Prevost conversion. Once again, Featherlite applied its now famous high quality craftsmanship to the Vogue.
The company also acquired the marketing and distribution system of Mitchell Motorcoach Sales, from which Featherlite was able to successfully market its now increased price point range in luxury motorcoaches and thereby broaden its market coverage. With the Featherlite Vogue, the company's presence in the recreation and leisure markets established Featherlite as the pacesetter for high-end luxury motorcoaches in the United States.
By 1998 when Featherlite marked its 25th anniversary, it boasted 1,737 employees. Featherlite's dealer network consisted of 240 full-line and approximately 900 limited-line dealers throughout the United States and in selected Canadian markets, further strengthening Featherlite's market penetration. The company implemented extensive training for all its dealers to improve their knowledge, experience, and productivity, and designed new, attractive marketing tools and reference materials to assist in closing sales. In addition to this network, the company had 75 Diamond D dealers nationwide and 30 regular and 1,500 part-time vendors in its vendor network throughout the Midwest. Another marketing strategy was its decision to take part in trade shows, fairs, and exhibitions annually. In 1998 alone, Featherlite's dealers worked 1,200 fairs with an additional 300 major exhibitions covered directly by Featherlite employees. Featherlite also made a major commitment to national advertising programs, including both print media and television.
Land, Sea, and Sky: 1998 and Beyond
In 1998 Featherlite decided to extend its penetration into an important niche market by establishing a formal agreement with Yamaha Motor Corporation USA to supply its line of recreational trailers to Yamaha dealers throughout the United States. The sales of motorcycle, snowmobile, ATV, and personal watercraft trailers through Yamaha dealers nationwide opened an important new distribution channel for Featherlite in this expanding recreational market.
Featherlite also began to venture into the aviation industry by starting a consulting and brokerage company, called Featherlite Aviation Company. The new company specialized in Beech and Cessna twin engine and turbine-powered product lines, offering professional aircraft brokerage and consulting primarily to existing clients wanting to purchase or sell quality aircraft. The company made a commitment to the city of Cresco, Iowa, to construct a hangar facility at a cost of approximately $300,000 as part of an airport expansion project.
By the late 1990s Featherlite trailers had a strong lead on competitors and orders for trailers were backed up. The company built a warehouse facility for raw material storage at its Cresco location at an approximate cost of $1.8 million financed with new borrowings and began a long range expansion of its Vantare facilities. At this time the company was using approximately one million pounds of aluminum per month. The availability and cost of aluminum, needless to say, was critical to the company. Therefore, Featherlite took a very aggressive stance in negotiating long-term commitments from its suppliers to provide, at a fixed price, substantially all of its total aluminum requirements on an established schedule into the future. The company estimated that even at a minimum increase of about four percent in the cost of aluminum it was money ahead.
Orders for specialty trailers continued to grow. By this time Featherlite produced over 400 custom order and standard model specialty trailers. Products included horse trailers, stock trailers, carhaulers, truck beds, utility trailers, commercial trailers, vending trailers, hospitality trailers, dry freight trailers, race car transporters, customized drop frame vans, ATV trailers, snowmobile trailers, watercraft trailers, and motorcycle trailers. Each year, the company produced approximately 8,000-10,000 trailers. Retail trailer prices ranged from approximately $1,000 for the small utility trailers to $250,000 for the most elaborate race car transporters to $650,000 for luxury coaches. The average trailer price was approximately $9,000.
Featherlite began investing more in promotions, developing such products as golf shirts, oxfords, jackets, T-shirts, sweatshirts, and collectibles that were displayed by sales department personnel and dealers at over 1,200 fairs, trade shows, races and other events throughout North America each year. The company also started to branch out into other recreation sport niches. In 1999 Featherlite held its first Featherlite Vogue Golf Tournament. The company donated a utility trailer that was positioned on the fairway of the second hole, giving players the opportunity to be the first to hit the trailer and take it home. Featherlite also became more involved in sponsorships that garnered recognition and publicity for its trailers. Sponsorships over the years of horse shows alone included: The Equine-All American Quarterhorse Congress, the National Cutting Horse Association, the National High School Rodeo Association, the Paso Fino Horse Association, the United States Team Roping Championships, the Livestock-Black Hills Stock Show, the Iowa State Fair, the National Finals Rodeo, the National Western World Pork Expo, the World's Toughest Rodeo, and the Professional Bull Riders.
The manufacturer also continued to dominate in the race car transporter business, with an estimated 80 percent of all drivers on the NASCAR Winston Cup series and many other teams hooked up to Featherlite race car transporters. For years it held the coveted title of "Official Trailer" of NASCAR, CART, IRL, NHRA, and the World of Outlaws sanctioning bodies, as well as the Indianapolis Motor Speedway and the Las Vegas Motor Speedway. Its race sponsorships included SPORTSCAR, the Featherlite Southwest Tour, the NASCAR Featherlite Modified Tour, the Eagle River Snowmobile Derby, and the Super Boat International Productions, Inc.
Throughout the growth and development of Featherlite, innovation, industry leadership, and top-notch products have been recognized as the company's key strengths. With a virtual lock on its core markets, and legions of loyal customers, Featherlite would likely remain a heavyweight in its industry well into the 21st century.
Principal Subsidiaries: Featherlite Aviation Company.
Further Reading:
"Featherlite Announces Management Appointments: Continued Company Growth Results in Management Team Expansion," PR Newswire, October 27, 1997.
"Featherlite Completes Acquisition of Vogue's Luxury Motorcoach Manufacturer," PR Newswire, May 5, 1998.
"Featherlite Named Official Trailer and Luxury Motorcoach of the National Hot Rod Association," PR Newswire, June 6, 1998.
"Featherlite Reports Record Net Income and Sales for Fiscal Year," PR Newswire, February 17, 1999.
"Featherlite to Supply Trailers to Yamaha Dealers," PR Newswire, November 7, 1997.
"History in Motorsports and Customer Base: A History of Quality and Innovation," PR Newswire, January 1999.
"Light Heavyweight: At 25 Featherlite Rules Among Specialty Trailers," PR Newswire, November 1998.
Source: International Directory of Company Histories, Vol. 28. St. James Press, 1999.
