PEMBROKE PINES, Fla., Aug. 14 /PRNewswire-FirstCall/ -- Decorator Industries, Inc. (AMEX:DII) today announced its operating results for the second quarter ended June 30, 2007.
Decorator Industries, Inc. (AMEX:DII), a supplier of interior furnishings for recreational vehicles ("RV"), manufactured housing ("MH") and the lodging industry, today reported net income of $64,000 or 2 cents per diluted share for the second quarter of fiscal 2007 compared with net income of $313,000 or 10 cents per diluted share in the second quarter of 2006. Sequentially, net income improved by $156,000 from the net loss of $92,000 reported in this year's first quarter. Net loss for the first six months of fiscal 2007 was $28,000 or 1 cent per diluted share compared with a profit of $861,000 or 28 cents per diluted share for the same period a year ago. The severe contraction of the RV and MH markets continued to impact our sales and income.
Net sales for the second quarter of fiscal 2007 were $12,671,000 down 12% from $14,479,000 for the same period a year ago. Net sales for the first six months of fiscal 2007 were $24,919,000, a decline of 14% from $29,141,000 in the first half of 2006.
Mr. Bassett, Chairman, stated: "Sales to our RV customers decreased about 15% to $6,998,000 in the second quarter of fiscal 2007, compared with last year's sales for the same period of $8,250,000. For the first six months of fiscal 2007 our RV sales decreased 17% to $14,383,000 compared with $17,377,000 for the same period a year ago. The RV industry reported a 10% decline in total shipments from the last year's second quarter, with towable shipments decreasing by 13% and motor home shipments increasing by 7%. Total RV industry shipments for the first six months of 2007 were down by 13%, with towable shipments decreasing 15% and motor home shipments increasing 2%.
"Sales to our MH customers decreased about 12% to $2,248,000 in the second quarter of fiscal 2007, compared with last year's second quarter sales of $2,542,000. For the six month period of fiscal 2007 our MH sales decreased about 22%, to $4,162,000 compared with $5,350,000 for the same period a year ago. The Manufactured Housing Institute reported that industry shipments decreased about 18% from last year's second quarter, resulting in a year-to- date decrease of about 28%.
"Sales to our Hospitality customers decreased about 7% to $3,425,000 in the second quarter of 2007 from $3,687,000 in the second quarter a year ago. For the first six months of 2007 Hospitality sales were $6,374,000 compared with $6,414,000 in the first six months of 2006. Sales to our Hospitality customers are impacted by the scheduling requirements of the individual properties and can vary significantly from period to period. Our fiscal 2007 revenues include $200,000 of sales related to the acquisition of Superior Drapery on June 1, 2007. Superior is a supplier of window treatments and bed coverings, mostly to motels located in the northeast.
"The decrease in sales from last year's second quarter is largely related to the difficult market conditions and more specifically the production levels and requirements of our RV and MH customers. The decline in gross profit of $483,000 from last year's second quarter is largely attributable to these lower revenues. The reduction in selling and administrative expenses of $94,000 from last year's second quarter is largely due to lower sales commissions and reduced performance compensation. The increase in both cost of products sold and the selling and administrative expenses as a percent of net sales, is primarily due to fixed expenses being absorbed over a lower sales volume.
"While the immediate outlook for our MH and RV business remains challenging, we are optimistic about our prospects for growth servicing the Hospitality market. We expect that the acquisition of Superior Drapery will be immediately accretive to earnings. Further, we are focused on increasing our relationships with major hotel/motel chains. We believe that our expanded capacity and sales and marketing initiatives should enable us to become a more significant resource to these lodging chains." 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 lodging industry.
(DIIG) THE UNAUDITED FIGURES ARE AS FOLLOWS CONDENSED STATEMENT OF INCOME FOR QUARTERS ENDED: FOR TWENTY SIX WEEKS ENDED: June 30, July 1, June 30, July 1,
2007 2006 2007 2006 NET SALES $12,671,235 $14,478,669 $24,918,652 $29,140,984
COST OF PRODUCTS
SOLD 10,421,302 11,745,484 20,738,310 23,449,981
GROSS PROFIT 2,249,933 2,733,185 4,180,342 5,691,003
SELLING AND
ADMINISTRATIVE
EXPENSES 2,149,300 2,243,365 4,221,578 4,340,669
OPERATING INCOME
(LOSS) 100,633 489,820 (41,236) 1,350,334 OTHER INCOME
(EXPENSE)
Interest, Investment
and Other Income 32,290 26,915 55,491 58,127
Interest Expense (19,323) (19,043) (42,584) (37,809)
EARNINGS (LOSS)
BEFORE INCOME TAXES 113,600 497,692 (28,329) 1,370,652
PROVISION FOR INCOME
TAXES 50,000 185,000 - 510,000 NET INCOME (LOSS) $63,600 $312,692 $(28,329) $860,652 EARNINGS (LOSS)
PER SHARE:
BASIC $0.02 $0.10 $(0.01) $0.29
DILUTED $0.02 $0.10 $(0.01) $0.28 WEIGHTED-AVERAGE
NUMBER OF SHARES
OUTSTANDING
BASIC 3,004,209 2,985,524 3,002,719 2,968,016
DILUTED 3,024,121 3,040,076 3,002,719 3,021,382 CONDENSED BALANCE SHEET June 30, 2007 December 30, 2006 CASH AND EQUIVALENTS $32,904 $11,379
ACCOUNTS RECEIVABLE 5,082,722 3,725,167
INVENTORIES 6,265,827 5,651,252
OTHER CURRENT ASSETS 517,233 984,145
TOTAL CURRENT ASSETS 11,898,686 10,371,943
NET PROPERTY AND EQUIPMENT 9,416,315 9,703,167
OTHER ASSETS 5,168,243 4,923,461
TOTAL ASSETS $26,483,244 $24,998,571 TOTAL CURRENT LIABILITIES $7,174,762 $4,989,585
LONG-TERM DEBT 1,192,000 1,741,444
DEFERRED TAXES 841,000 839,000
STOCKHOLDERS' EQUITY 17,275,482 17,428,542
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $26,483,244 $24,998,571
DATASOURCE: Decorator Industries, Inc.
CONTACT: William Bassett, Chairman of Decorator Industries, Inc., +1-954-436-8909 Web site: http://www.decoratorindustries.com/
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