Dorsey Trailers, Inc. Posts $0.34 Per Share Improvement Over Q3 1997
21 October 1998
Dorsey Trailers, Inc. Posts $0.34 Per Share Improvement Over Third Quarter 1997
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