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DENALI ANNOUNCES FOURTH QUARTER
AND FISCAL YEAR 2000 RESULTS
OCTOBER 13, 2000
- HOUSTON, TEXAS - Denali Incorporated (NASDAQ:DNLI) today announced results
for its fourth quarter and fiscal year ended July 1, 2000.
For
the fiscal 2000 fourth quarter, net loss was $7.7 million, or $1.38 per
share, on $45.9 million of revenue.
Net income for the fourth quarter of fiscal year 1999 was $1.7
million, or $0.35 per share, on $38.5 million of revenue.
For fiscal year 2000, net
loss was $9.7 million, or $1.75 per share, on $189.9 million of revenue,
as compared to net income of $4.1 million, or $0.84 per share, on $148.8
million of revenue in the prior fiscal year.
The net loss in fiscal year
2000 was primarily the result of (i) a decrease in revenues attributable
to the Company's storage tank business due to a decline in the demand
associated with the expiration of EPA requirements; (ii) decreased operating
margins in the Company's engineered products businesses; (iii) an increase
in interest expense due to borrowings incurred to finance the acquisition
of Welna, N.V.; and (iv) restructuring charges attributable to workforce
reductions and other costs related to a plant closure.
Charges incurred during the
fourth quarter of fiscal year 2000 include write-offs of the following:
an uncollected receivable of $0.8 million primarily due to the bankruptcy
of a large customer; $1.0 million in non-performing assets, an international
joint venture investment and obsolete inventory; $0.7 million related
to project performance problems associated with the Plasticon Fluid Systems
group (formerly known as Specialty Solutions); and $3.0 million due to
realization uncertainty of net operating loss tax assets and other deferred
tax assets. In addition to
these write-offs, the Company incurred restructuring charges of $1.1 million
associated with a manufacturing facility closure within the Welna group.
Denali continues to engage
in negotiations with William Blair Mezzanine Capital Fund III, L.P. whereby
the fund proposes to invest in excess of $20 million in the Company. Management
believes that the investment by the private equity fund, if completed,
will resolve the Company's liquidity problems. "With a continued
improvement in the markets served by the Company in the U.S., a stable
underground storage tank market and business realignment, we are positioned
to capitalize on opportunities to improve performance within the Denali
Americas group," stated Dick Volk, Chairman, CEO, and President.
"Additionally, restructuring within Denali's Plasticon Europe
group should greatly improve its performance on an ongoing basis."
Denali Incorporated is a
provider of fluid handling products, specializing in corrosion-resistant
applications in process industries.
The Company is a manufacturer of engineered fiberglass-composite
products, including tanks, vessels, and piping systems, as well as steel,
aboveground storage tanks. The
Company also distributes a wide range of engineered products and systems.
Denali Incorporated is headquartered in Houston, Texas, and markets
its products worldwide through its subsidiaries Containment Solutions
(Houston); Plasticon Fluid Systems companies (headquartered in Tulsa)
of Ershigs, Fibercast, Belco, and SEFCO; and the Welna companies of Plasticon
Europe and Hanwel Europe (The Netherlands and Germany), Plasticon Poland,
Plasticon U.K., and Plasticon France.
For more information on the Company, please visit its Website at
www.denaliincorporated.com.
This news
release contains certain forward-looking statements as such term is defined
in the Private Securities Litigation Reform Act of 1995 and information
relating to the company and its subsidiaries that are based on the beliefs
of the company's management as well as assumptions made by and information
currently available to the company management.
When used in this report, the words, "anticipate", "believe",
"estimate", "expect", and "intend" and words
or phrases of similar import, as they relate to the company or its subsidiaries
or company management, are intended to identify forward-looking statements.
Such statements reflect the current risks, uncertainties and assumptions
related to certain factors including, without limitations, competitive
factors, general economic conditions, customer relations, relationships
with vendors, the interest rate environment, governmental regulation and
supervision, seasonality, distribution networks, product introductions
and acceptance, technological change, changes in industry practices, onetime
events and other factors described herein.
Based upon changing conditions, should any one or more of these
risks or uncertainties materialize, or should any underlying assumptions
prove incorrect, actual results may vary materially from those described
herein as anticipated, believed, estimated, expected or intended.
-
Table to Follow -
DENALI INCORPORATED
Financial
Highlights
|
|
Three
months ended
|
Year
ended
|
| |
|
July
1, 2000
|
July
3, 1999
|
July
1, 2000
|
July
3, 1999 (C)
|
| |
|
(In
thousands, except per share amounts)
|
| Revenues
|
|
$45,854 |
$38,544 |
$189,917 |
$148,760 |
| - |
| Gross
Margin |
|
$7,238 |
$10,236 |
$40,599 |
$37,803 |
|
% of Revenue
|
|
15.8% |
26.6% |
21.4% |
25.4% |
| - |
| SG&A Expense |
|
$9,740 |
$6,673 |
$38,619 |
$27,926 |
| Restructuring
Charges |
|
$1,135 |
- |
$3,816 |
- |
Operating
income (loss)
|
|
($3,637)
|
$3,563
|
($1,836)
|
$9,877 |
|
% of Revenue
|
|
(7.9)% |
9.2% |
(1.0)% |
6.6% |
| - |
| Extraordinary Loss (A) |
|
- |
- |
- |
($281) |
| - |
| Net
Income (Loss) |
|
($7,659) |
$1,724 |
($9,656) |
$4,120 |
|
% of Revenue
|
|
(16.7)% |
4.5% |
(5.1)% |
2.8% |
| - |
| Earnings
per Share (B): |
|
|
|
|
|
|
Basic |
|
($1.38) |
$0.35 |
($1.75) |
$0.84 |
|
Diluted |
|
($1.38) |
$0.35 |
($1.75) |
$0.84 |
| - |
|
Average
Shares Outstanding: |
|
|
|
|
|
|
Basic |
|
5,559 |
4,943 |
5,518 |
4,886 |
|
Diluted |
|
5,559 |
4,944 |
5,518 |
4,888 |
|
(A) Extraordinary item associated with the early retirement of
debt.
(B) Earnings per diluted share for the year ended July 3, 1999 was
$0.99 excluding the extraordinary item.
(C) The Company uses a 52- or 53-week year ending on the Saturday
closest to June 30. The fiscal year ended July 3, 1999 was a 53-week
year.
|
| - |
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