Dorsey Trailers, Inc. Announces First Quarter Results
21 April 1998
Dorsey Trailers, Inc. Announces First Quarter Results
ATLANTA, April 21 -- Dorsey Trailers, Inc.
(OTC Bulletin Board: DSYT)(DSYT) announced today results for first quarter
1998, indicating continued improvement in margins and operating results.
These results, including the decline in revenue, take into effect the full
impact of major flooding that occurred in the Company's primary production
facility in Elba, Alabama in March. The net loss for the first quarter of
1998 was $0.6 million or $.13 per share compared to net loss for the same
period in 1997 of $5.5 million or $1.10 per share. Net sales for the first
quarter of 1998 were $35.4 million compared to net sales for the same period
in 1997 of $41.0 million. New trailer sales revenue for the first quarter of
1998 increased to $33.9 million compared with new trailer sales for the same
period in 1997 of $32.1 million.
Marilyn R. Marks, Chairman and Chief Executive Officer, commenting on the
results, stated, "Despite the flooding of our Elba, Alabama plant in March
1998, I am pleased to report that the Company continues to benefit from rapid
operational improvements and that the Company's recovery is on track. We made
modest increases in production in the first quarter followed by additional
increases in the second quarter of 1998. We estimate that the Elba flood
reduced first quarter new trailer sales volume by approximately 14%. The
operating loss that the Company reported in the first quarter is attributable
primarily to these lost sales and to the additional costs incurred to return
the Elba plant to full production after the flood. The Company has recovered
from the effects of the flood. We do not expect the flood to impact second
quarter operations."
Marks went on to say, "In the latter half of 1997, we implemented a
strategy of rebuilding our independent dealer organization, targeting more
profitable customized niche markets, and designing more effective
manufacturing systems by eliminating non-value added processes and costs.
These strategies have resulted in improved pricing and margins, as
demonstrated by the favorable comparisons to 1997. We continued our
investment in additional sales and manufacturing resources in the first
quarter. We anticipate several quarters of incremental improvement before we
experience the full impact of these strategies.
Demand for truck and trailer equipment continues to be strong, and
industry backlogs continue to be healthy. We expect healthy economic
conditions to continue to fuel the domestic freight market and the strong
demand for transportation equipment."
Dorsey Trailers, Inc. designs, manufactures, and markets one of the
broadest lines of high-quality, 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 to the Company, reliance on certain
customers, shortages of raw materials, labor shortages or work stoppage,
dependence on industry trends, government regulations 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 1O-Q.
DORSEY TRAILERS, INC.
Financial Highlights - Unaudited
For the Quarter-Ended
April 4, 1998 March 29, 1997
(in thousands, except per share data)
Net sales $35,355 $40,961
Cost of sales 34,644 44,329
Gross profit (loss) 711 (3,368)
Selling, general and administrative
expenses 1,357 1,745
Provision for plant closing 145 48
Loss from operations (791) (5,161)
Interest expense, net (424) (517)
Gain on property sales 568 ---
Loss before income taxes (647) (5,678)
Benefit from income taxes --- (200)
Net loss $ (647) $(5,478)
Basic loss per share $ (0.13) $ (1.10)
Weighted average number of
common and common share
equivalents 5,013 4,997
DORSEY TRAILERS, INC.
Balance Sheet
(In thousands, except per share data)
April 4, Dec. 31,
1998 1997
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 7 $ 8
Accounts receivable, net 4,713 6,811
Inventories 13,892 11,479
Prepaid expenses and other assets 96 540
Total current assets 18,708 18,838
Property, plant and equipment, net 8,003 8,447
Deferred income taxes 4,179 4,179
Other assets, net 1,904 1,903
Total assets $32,794 $33,367
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current portion of long-term debt $ 423 $ 350
Accounts payable 16,298 12,638
Accrued wages and employee benefits 4,572 4,348
Accrued expenses 1,927 3,156
Total current liabilities 23,220 20,492
Long-term debt, net of current
maturities 11,931 14,585
Accrued pension liability 1,600 1,600
Accrued warranty 1,000 1,000
Total 37,751 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;
5,013,422 and 4,997,422 shares
issued and outstanding 50 50
Additional paid-in capital 2,595 2,595
Accumulated deficit (7,525) (6,878)
Unrecognized pension liability (77) (77)
Total stockholders' deficit (4,957) (4,310)
Commitments and contingencies --- ---
Total liabilities and stockholders'
deficit $32,794 $33,367
SOURCE Dorsey Trailers, Inc.