Dorsey Trailers, Inc. Announces Q2 Results
21 July 1998
Dorsey Trailers, Inc. Announces Profitable Second Quarter
ATLANTA, July 21 -- Dorsey Trailers, Inc.
(OTC Bulletin Board: DSYT) announced today results for second quarter 1998,
indicating continued improvement in margins and operating results. Net income
for the second quarter of 1998 was $106,000 or $0.02 per share compared to net
loss for the same period in 1997 of $2.97 million or ($0.60) per share. Net
loss for the six months ended July 4, 1998 was $541,000 or ($0.11) per share
compared to a net loss for the same period in 1997 of $8.45 million or ($1.70)
per share.
Net sales for the second quarter of 1998 were $39.9 million compared to
net sales for the same period in 1997 of $40.0 million. New trailer sales
revenue for the second quarter of 1998 increased by 10% to $38.6 million
compared with new trailer sales for the same period in 1997 of $35.1 million.
Net sales for the six months ended July 4, 1998 were $75.3 million compared to
net sales for the same period in 1997 of $81.0 million. New trailer sales for
the six months ended July 4, 1998 were $72.5 million compared with new
trailers sales for the same period in 1997 of $67.3 million. Net sales for
the six months ended July 4, 1998 were negatively impacted by flooding in the
Company's Elba, Alabama plant in March 1998. Management estimates that the
Elba flood reduced new trailer sales for the first six months of 1998 by
approximately $6 million.
Marilyn R. Marks, Chairman and Chief Executive Officer, commenting on the
results, stated, "We are very pleased to report our return to profitability
attributed to quite significant improvements in all areas of the Company. The
first six months of the year showed a $7.9 million improvement in
profitability over the same period last year. The continuing improvements are
a result of a more profitable product mix, and increased pricing. We
attribute the gains made in pricing and product mix to our renewed focus in
the last year on customized trailers, niche markets and the strong market for
transportation equipment. This renewed focus on customized trailers has been
accomplished through a renewed emphasis on markets served by Dorsey's
independent dealer network, providing opportunities to optimize our well-known
design and manufacturing capabilities, outside the traditional commodity
trailer market. The profitable contributions of our two newest plants in
Georgia and South Carolina continued to increase as production rates and
manufacturing efficiencies were increased during the quarter for the specialty
trailers these plants produce."
Marks went on to say, "The truck trailer industry's recent build rate has
outstripped industry suppliers' production capacity. Consequently, the
industry experienced shortages of key raw materials throughout the quarter.
Dorsey also experienced plant inefficiencies in the second quarter which are
directly attributable to these component shortages. It appears that these
shortages have abated somewhat. We expect plant productivity improvements as
availability of key components improves.
"Dorsey is continuing to focus on the long term health and growth of the
business by making important investments in people and in the facilities. In
the last year, Dorsey has recruited a number of strong key executives with
industry experience. In my opinion, the current management team is the
strongest team I have had the opportunity to work in since the purchase of the
Company in 1987. We are implementing rapid changes in our plants and
distribution system. For example, the production lines in the Elba, Alabama
plant were modified this month for more efficient, less costly production of
dry freight trailers.
"As stated in prior quarters, demand for transportation equipment
continues to be strong, and industry backlogs are 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 10-Q.
DORSEY TRAILERS, INC.
BALANCE SHEETS
(In thousands, except per share data)
July 4, Dec. 31,
1998 1997
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 7 $ 8
Accounts receivable, net 11,420 6,811
Inventories 14,389 11,479
Prepaid expenses and other assets 117 540
Total current assets 25,933 18,838
Property, plant and equipment, net 7,729 8,447
Deferred income taxes 4,179 4,179
Other assets, net 1,810 1,903
Total assets $39,651 $33,367
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current portion of long-term debt $ 430 $ 350
Accounts payable 17,632 12,638
Accrued wages and employee benefits 4,040 4,348
Accrued expenses 2,004 3,156
Total current liabilities 24,106 20,492
Long-term debt, net of current
maturities 17,766 14,585
Accrued pension liability 1,600 1,600
Accrued warranty 1,000 1,000
Total 44,472 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 2,625 2,595
Accumulated deficit (7,419) (6,878)
Unrecognized pension liability (77) (77)
Total stockholders' deficit (4,821) (4,310)
Commitments and contingencies --- ---
Total liabilities and stockholders'
deficit $39,651 $33,367
DORSEY TRAILERS, INC.
Financial Results - Unaudited
For the Quarter-Ended Six Months ended
7/4/98 6/29/97 7/4/98 6/29/97
(In thousands, except per share data)
Net sales $39,911 $40,032 $75,266 $80,993
Cost of sales 37,828 40,696 72,472 85,025
Gross profit (loss) 2,083 (664) 2,794 (4,032)
Selling, general and
administrative expenses 1,575 1,770 2,932 3,515
Provision for plant
closing 50 35 195 83
Income (loss) from
operations 458 (2,469) (333) (7,630)
Interest expense, net (352) (505) (776) (1,022)
Gain on Property Sales --- --- 568 ---
Income (loss) before
income taxes 106 (2,974) (541) (8,652)
Benefit from income taxes --- --- --- (200)
Net income (loss) $ 106 $ (2,974) $ (541) $ (8,452)
Basic income (loss)
per share $ 0.02 $ (0.60) $ (0.11) $ (1.70)
Weighted average number
of common and common
share equivalents 5,017 4,971 5,015 4,978