PEMBROKE PINES, Fla., Nov. 12 /PRNewswire-FirstCall/ -- Decorator Industries, Inc. (AMEX:DII), a supplier of interior furnishings for recreational vehicles ("RV"), manufactured housing ("MH") and the hospitality industry, today announced results for the three and nine month periods ending September 29, 2007.
Third quarter 2007 net sales decreased 10% to $11.2 million compared to $12.5 million for the same period a year ago. Net sales for the first nine months of 2007 decreased 13% to $36.2 million compared with $41.6 million in 2006. Net loss for third quarter of 2007 was $114,392 or 4 cents per diluted share compared with net loss of $186,881 or 6 cents per diluted share in last year's third quarter. Net loss for the first nine months of fiscal 2007 was $142,721 or 5 cents per diluted share compared with net income of $673,771 or 22 cents per diluted share for the same period a year ago.
Mr. Bassett, Chairman, stated: "Sales to our RV customers decreased by 18% to $6.1 million in the third quarter of 2007, compared with last year's sales for the same period of $7.4 million. For the nine month period of 2007, our RV sales decreased 17% to $20.5 million compared with $24.8 million for the same period a year ago. The Recreational Vehicle Industry Association reported a 7% decline in total industry shipments during the third quarter, with towable shipments decreasing by 7% and motor home shipments declining by 5%. Year-to-date industry shipments were down 11%, with towable shipments decreasing 13% and motor home shipments flat.
"Sales to our MH customers decreased by 10% to $2.0 million in the third quarter of 2007, compared with last year's sales for the same period of $2.3 million. For the nine month period of 2007, our MH sales decreased 18% to $6.2 million compared with $7.6 million for the same period a year ago. The Manufactured Housing Institute reported that industry shipments decreased by 10% for the third quarter of 2007, resulting in a year-to-date decrease of 22%.
"Sales to our Hospitality customers increased by 11% to $3.1 million in the third quarter of 2007 compared with last year's sales for the same period of $2.8 million. For the nine-month period of 2007, Hospitality sales increased 3% to $9.5 million compared with $9.2 million for the same period a year ago. This included sales from Superior Drapery, acquired on June 1, 2007, of $533,000 in the third quarter of 2007 and $763,000 for the year.
"The decreases in net income compared to the three and nine month periods a year ago can be largely attributed to the decrease in sales volume. The results for the quarter would have been a break even had we not incurred $52,000 in prior period costs, a $72,000 valuation adjustment to freight reserves, and $50,000 in excess fabric reserves for which we might be overly conservative. Cost of goods sold decreased 3.7% as a percentage of sales from the third quarter of 2006, primarily due to an unusually high obsolescence charge in the third quarter of 2006. General and administrative costs increased $107,000 in the third quarter of 2007 due to the acquisition of Superior Drapery.
"Our financial condition remains very strong with stockholders' equity of $17.1 million. Long term debt was $1.2 million or 6.6% of total capital.
"The sales decrease in the third quarter and year to date can be partially attributed to the slow down in the RV and MH markets as well as lower performance by our customers. Both the RV and MH original equipment manufacturers continue to operate at lower volumes when compared to a year ago. The weakness in RV towable shipments, which began in August 2006, has continued through all of 2007. The MH industry has not shown any improvement and can be expected to close the year with total shipments below 100,000 for the first time since 1961. On a brighter side, the hospitality industry continues to forecast growth with Lodging Econometrics forecasting 135,000 new rooms in 2008 and 165,000 in 2009.
"We are committed to pursuing opportunities for growth and will continue to make strategic investments to ensure we are the supplier of choice in all the markets we serve.
"As the MH and RV business continues to struggle, we look to the Hospitality market for current growth opportunities. We are expanding our hospitality marketing initiatives to get the message out about our enhanced manufacturing capabilities and strategic locations. We continue to focus on adding new relationships with major hotel/motel 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 hospitality industry.
THE UNAUDITED FIGURES ARE AS FOLLOWS DECORATOR INDUSTRIES, INC
STATEMENTS OF EARNINGS
(UNAUDITED) For the Thirteen For the Thirty-Nine
Weeks Ended Weeks Ended
September 29, September 30, September 29, September 30,
2007 2006 2007 2006 Net Sales $11,240,119 $12,469,174 $36,158,771 $41,610,158
Cost of Products
Sold 9,242,306 10,715,218 29,980,616 34,165,199
Gross Profit 1,997,813 1,753,956 6,178,155 7,444,959 Selling and
Administrative
Expenses 2,176,488 2,069,259 6,398,066 6,409,928
Operating (Loss)/
Income (178,675) (315,303) (219,911) 1,035,031 Other Income (Expense)
Interest, Investment
and Other Income 24,336 32,866 79,827 90,993
Interest Expense (26,053) (24,444) (68,637) (62,253)
(Loss)/Earnings Before
Income Taxes (180,392) (306,881) (208,721) 1,063,771
Provision for Income
Taxes (66,000) (120,000) (66,000) 390,000
Net (Loss)/Income $(114,392) $ (186,881) $(142,721) $673,771
(LOSS)/EARNINGS PER
SHARE
Basic $ (0.04) $(0.06) $(0.05) $ 0.23
Diluted $ (0.04) $(0.06) $(0.05) $ 0.22
Weighted Average
Number of Shares
Outstanding
Basic 3,007,223 2,996,241 3,004,220 2,977,424
Diluted 3,007,223 2,996,241 3,004,220 3,030,863 CONDENSED BALANCE SHEET (UNAUDITED)
September 29, December 30,
2007 2006 Cash and Equivalents $31,214 $11,379
Accounts Receivable 3,911,240 3,725,167
Inventories 6,048,250 5,651,252
Other Current Assets 622,993 984,145
Total Current Assets 10,613,697 10,371,943
Net Property and Equipment 9,355,609 9,703,167
Other Assets 5,134,429 4,923,461
Total Assets $25,103,735 $24,998,571 Total Current Liabilities $5,952,306 $4,989,585
Long-Term Debt 1,200,500 1,741,444
Deferred Taxes 854,000 839,000
Stockholders' Equity 17,096,929 17,428,542
Total Liabilities and
Stockholders' Equity $25,103,735 $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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