PEMBROKE PINES, Fla., Aug. 14 /PRNewswire-FirstCall/ -- Decorator Industries, Inc. (AMEX:DII), a supplier of interior furnishings for recreational vehicles ("RV"), manufactured housing ("MH") and the lodging industry, today reported a 30% increase in net income and a 9% increase in net sales for the quarter ending July 1, 2006. For the first six months of 2006, net income increased 30% and net sales increased 13%.
Net Income for the second quarter of 2006 was $312,692, or 10 cents per diluted share, compared with $241,317, or 8 cents per diluted share, in last year's second quarter. Net income for the first six months of 2006 increased to $860,652, or 28 cents per diluted share, compared with $659,653, or 22 cents per diluted share, for the same period a year ago.
Net sales were $14,478,669 and $29,140,984, respectively, for the second quarter and first six months of 2006, record sales for both periods. Net sales for the same periods of 2005 were $13,275,952 and $25,707,334.
Mr. Bassett, Chairman, stated: "Sales to our RV customers increased 17% to $8,250,000 in the second quarter of 2006, compared with last year's second quarter sales of $7,060,000. In contrast to the first quarter of 2006, which included about $1,100,000 of hurricane-related sales for Emergency Living Units (ELUs) used by the Federal Emergency Management Agency, our RV sales did not include any sales for ELUs in the second quarter of 2006. For the six month period of 2006 our RV sales increased 21%, to $17,377,000 compared with $14,351,000 for the same period a year ago. Excluding the ELU sales in the first quarter of this year, the 2006 six month comparative RV sales increase would be about 14%.
"As in the first quarter, the RV industry reported mixed results for the second quarter of 2006. Towable shipments increased by 19% and motor home shipments decreased by 11% for a total RV industry increase of about 14%. Likewise, industry shipments of towables for the six months of 2006 were up 20% and motor homes were down 12% for a combined increase of 14%.
"Sales to our MH customers decreased about 5% to $2,542,000 in the second quarter of 2006, compared with last years second quarter sales of $2,671,000. For the six month period of 2006 our MH sales increased 4%, to $5,350,000 compared with $5,128,000 for the same period a year ago. The Manufactured Housing Institute reported that industry shipments decreased about 5% for the second quarter of 2006. This is in contrast to a 9% increase in the first quarter of 2006 most likely attributable to hurricane-related FEMA orders. The six month figures for 2006 increased about 2% industry-wide when compared to the same period in 2005.
"Our sales to Hospitality customers increased 4% to $3,687,000 in the second quarter of 2006, compared with $3,545,000 in the same period a year ago. For the first six months of 2006, Hospitality sales increased 3% to $6,414,000 from $6,228,000 in the first six months of 2005. We believe we are in the early stages of a growth cycle for this industry and have implemented marketing initiatives and plant expansions, which we believe will enable us to better serve this market. Indicative of the health of the Hospitality industry, Lodging Econometrics (LE), the Industry Authority for Hotel Real Estate, in its mid-year report stated that 'construction starts for the last four quarters accelerated to a 50% year-over-year increase, the highest level for this cycle. It reflects a higher pace of new project announcements and is an indicator that projects are now migrating forward more rapidly.' "Gross profit for the second quarter of 2006 increased by $144,785 from last year's second quarter. Gross profit as a percent of sales declined from 19.5% to 18.9% primarily due to increased manufacturing costs. Selling and administrative expenses increased in the second quarter of 2006 by $40,414 from the same period last year. As a percent of sales SG&A expenses were 15.5% in the second quarter versus 16.6% in the same period a year ago. The second quarter of 2005 included a pretax charge of $165,647 resulting from a decision to convert the Company's ERP system to a new platform. Without this charge, SG&A expenses as a percent of sales would have been 15.3% in the second quarter of last year.
"Our financial condition is very strong with stockholders' equity of $18,003,106. Long term debt was $1,451,232 or 7.5% of total capital. Working capital increased to $6,456,439 from $5,273,153 a year ago." Statements contained in this release that are not historical facts are forward-looking statements that could differ materially from actual results. Primary factors that could cause actual results to materially differ from those in the forward-looking statements are the level of demand for recreational vehicles, manufactured housing and hotel/motel accommodations, the general economic conditions, interest rate fluctuations, competitive products and pricing pressures within the Company's markets, the Company's ability to contain its manufacturing costs and expenses, and other factors.
Decorator Industries, Inc., founded in 1953, designs, manufactures and sells interior furnishing products, principally draperies, curtains, shades, blinds, valance boards, bedspreads, comforters, pillows, cushions and trailer tents. Decorator is a leading supplier of such products to the manufactured housing and recreational vehicle markets and is a growing supplier to the hospitality market.
(DIIG) THE UNAUDITED FIGURES ARE AS FOLLOWS: CONDENSED STATEMENT OF INCOME FOR QUARTERS ENDED: FOR TWENTY SIX WEEKS ENDED: JULY 1, 2006 JULY 2, 2005 JULY 1, 2006 JULY 2, 2005 NET SALES $14,478,669 $13,275,952 $29,140,984 $25,707,334 NET INCOME $312,692 $241,317 $860,652 $659,653 EARNINGS PER SHARE:
BASIC $0.10 $0.08 $0.29 $0.23
DILUTED $0.10 $0.08 $0.28 $0.22 WEIGHTED-AVERAGE
NUMBER OF SHARES
OUTSTANDING 2,985,524 2,880,102 2,968,016 2,866,186 CONDENSED BALANCE SHEET JULY 1, 2006 DECEMBER 31, 2005 CASH AND EQUIVALENTS $587,114 $490,377
ACCOUNTS RECEIVABLE 5,726,759 4,574,415
INVENTORIES 6,647,701 5,800,553
OTHER CURRENT ASSETS 594,072 311,603
TOTAL CURRENT ASSETS 13,555,646 11,176,948
NET PROPERTY AND EQUIPMENT 7,720,726 7,431,823
OTHER ASSETS 5,861,173 5,685,594
TOTAL ASSETS $27,137,545 $24,294,365
TOTAL CURRENT LIABILITIES $7,099,207 $5,084,599
LONG-TERM DEBT 1,451,232 1,536,754
DEFERRED TAXES 584,000 585,000
STOCKHOLDERS' EQUITY 18,003,106 17,088,012
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $27,137,545 $ 24,294,365
DATASOURCE: Decorator Industries, Inc.
CONTACT: William Bassett, Chairman, Decorator Industries, +1-954-436-8909 Web site: http://www.decoratorindustries.com/
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