Dorsey Trailers, Inc. Posts $0.34 Per Share Improvement Over Q3 1997

21 October 1998

    ATLANTA, Oct. 20 -- Dorsey Trailers, Inc. (DSYT) announced
today results for the third quarter of 1998.  Dorsey incurred a net loss for
the third quarter of 1998 of $249,000 or $.05 per share compared to a net loss
for the same period of $1.9 million or $.39 per share, a $1.7 million
improvement over the 1997 corresponding period.  Dorsey incurred a net loss
for the nine months ended October 3, 1998 of $790,000 or $.16 per share
compared to a net loss for the same period in 1997 of $10.4 million or
$2.09 per share, a $9.6 million improvement over the corresponding period.
    Net sales for the third quarter of 1998 were $35.7 million compared to net
sales for the same period in 1997 of $37.6 million.  New trailer sales for the
third quarter of 1998 increased by 2.4% to $34.5 million compared with new
trailer sales for the same period in 1997 of $33.7 million.  Net sales for the
nine months ended October 3, 1998 were $111.0 million compared to net sales
for the same period in 1997 of $118.6 million.  New trailer sales for the nine
months ended October 3, 1998 were $107.0 million compared with new trailer
sales for the same period in 1997 of $101.0 million, a 5.9% increase.
1998 net sales reflect a lower volume of used trailer sales as well as a loss
of revenue due to the March 1998 flood and the hurricane activity of August
and September.
    The Company's gross profit margin for the third quarter of 1998 was
4.7% compared to a gross profit margin of 0.5% for the same period in 1997.
The Company's gross profit margin for the nine months ended October 3, 1998
was 4.0% compared to a negative gross margin of 3.2% for the same period in
1997.
    Marilyn R. Marks, Chairman and Chief Executive Officer, commenting on the
results, stated, "We continue to be encouraged by our greatly improved
operating performance and the generation of positive cash flow since the
fourth quarter of 1997.  In a significant turnaround, the Company has improved
operating results from a loss of $9.0 million for the first nine months in
1997 to a profit of $21,000 for the same period in 1998.  To accelerate our
improvement, we took an aggressive approach to our one-week vacation shutdown
in July at our Elba, Alabama Plant.  During that week, in addition to
addressing routine maintenance issues, we revamped and consolidated our dry
freight manufacturing lines for more efficient production, and added
subassembly capabilities.  While the shutdown negatively impacted third
quarter sales and profitability, we believe that we made an excellent
investment decision in our largest production facility.  We feel that we have
laid an excellent foundation for continued operational improvement.  The
Company has experienced improved performance at the Elba facility since the
shutdown and related process changes in comparison to previous months.
    "Dorsey continues to focus on specialized products and dealer distribution
which yield improved margins.  The Company has added several new key dealers
during the year and expects to see improvement in its dealer distribution as
this network matures and the Company obtains deeper penetration in targeted
customized markets.  The current industry demand remains healthy as a strong
freight market continues to require more equipment.  However, in the event of
a major economic downturn, we believe that a strong dealer network provides a
more stable and diverse customer base."
    Dorsey Trailers, Inc. designs, manufactures, and markets one of the
broadest lines of highquality, customized truck trailers through three plants
located in Alabama, Georgia, and South Carolina.

    Certain statements in this press release and statements by the Company in
reports to its stockholders and public filings, as well as, oral public
statements by Company representatives may be deemed to be forward-looking
statements, as defined by the Private Securities Litigation Reform Act of
1995.  Any forward-looking statements included herein have been included based
upon facts available to management as of the date of the statement.  Any
forward-looking statement is, however, inherently subject to the uncertainty
of future events, whether economic, competitive or otherwise, many of which
are beyond the control of the Company, or which may involve determinations
which may be made by management in the future.  There can, therefore, be no
assurances that the events or results described in such forward-looking
statements will occur, and actual events or results may vary materially from
those included herein.
    Without limitation, the following are some of the factors which may affect
whether the events or results described in such forward-looking statements
will occur:  increased competition, dependence on key management, continued
availability of credit from vendors, continued advancement of funds from
lender, reliance on certain customers, shortages of raw materials, component
prices, labor shortages or work stoppage, dependence on industry trends and
demand for product, manufacturing interruption due to unfavorable natural
events, government regulations, unfavorable results of outstanding litigation
and new technologies or products.  Readers should review and consider the
various disclosures made by the Company in this press release and in its
reports to stockholders and periodic reports on Form 10-K and 10-Q.

                            DORSEY TRAILERS, INC.
                                Balance Sheet
                      (in thousands, except share data)

                                                     October 3,   December 31,
                                                          1998           1997
                                                    (unaudited)
    ASSETS
     Current Assets
      Cash and cash equivalents                     $        8     $        8
      Accounts receivable, net                           8,512          6,811
      Inventories                                       13,694         11,479
      Prepaid expenses and other assets                    169            540
        Total current assets                            22,383         18,838

     Property, plant and equipment, net                  7,686          8,447
     Deferred income taxes                               4,179          4,179
     Other assets, net                                   1,717          1,903
        Total assets                                $   35,965     $   33,367

    LIABILITIES AND STOCKHOLDERS' DEFICIT
     Current liabilities
      Current portion of long-term debt             $      543     $      350
      Accounts payable                                  15,941         12,638
      Accrued wages and employee benefits                3,921          4,348
      Accrued expenses                                   1,210          3,156
        Total current liabilities                       21,615         20,492
     Long-term debt, net of current maturities          16,820         14,585
     Accrued pension liability                           1,600          1,600
     Accrued warranty                                    1,000          1,000
                                                        41,035         37,677

     Stockholders' deficit
      Preferred stock, $.01 par value, 500,000 shares
       authorized:  none issued or outstanding
      Common stock, $.01 par value, 30,000,000 shares
       authorized:  5,020,280 and 5,013,422 shares
       issued and outstanding                               50             50
      Additional paid-in capital                         2,625          2,595
      Accumulated deficit                               (7,668)        (6,878)
      Unrecognized pension liability                       (77)           (77)
        Total stockholders' deficit                     (5,070)        (4,310)
      Commitments and contingencies                         --             --
        Total liabilities and stockholders' deficit $   35,965     $   33,367

                            DORSEY TRAILERS, INC.
                        Financial Results - Unaudited
                     (in thousands except per share data)

                           For the Quarter Ended    For the Nine Months Ended
                         October 3, September 27,     October 3, September 27,
                              1998          1997           1998          1997

    Net sales            $  35,741     $  37,598      $ 111,007     $ 118,591
    Cost of sales           34,064        37,392        106,536       122,417
    Gross profit (loss)      1,677           206          4,471        (3,826)

    Selling, general
     and administrative
     expenses                1,239         1,666          4,171         5,181
    Provision for (benefit
     from) plant closing        84           (43)           279            40

    Income (loss) from
     operations                354        (1,417)            21        (9,047)
    Interest expense, net     (603)         (528)        (1,379)       (1,550)
    Gain on Property Sales      --            --            568            --
    Income (loss) before
     income taxes             (249)       (1,945)          (790)      (10,597)
    Benefit from income
     taxes                      --            --             --          (200)

    Net income (loss)    $    (249)    $  (1,945)     $    (790)    $ (10,397)
    Basic income (loss)
     per share           $   (0.05)    $   (0.39)     $   (0.16)    $   (2.09)

    Weighted average
     number of common
     and common share
     equivalents:
      Basic                  5,020         4,986          5,017         4,981