Denali news & news releases

April 26, 1999 Denali reports significant increase in earnings for third quarter. Houston - Denali Incorporated (Nasdaq: DNLI) today reported net income for the third quarter ended March 27, 1999, was $195,000, or $.04 per diluted share on revenues of $36.3 million. Denali Incorporated’s net income was $476,000 or $.10 per diluted share, excluding an extraordinary loss associated with the unamortized debt origination costs in connection with the extinguishment of its prior credit facilities. As compared to the same quarter the prior year, revenues increased 68% and earnings, before extraordinary charges, increased 250% to $476,000 from $135,000. For the nine months ended March 27, 1999, as compared to the nine months ended March 28, 1998, revenues increased over 60% to $110.2 million from $68.5 million. For the same periods, net income increased 190% to $3,100,000 from $1,062,000, excluding the impact of non-recurring compensation and extraordinary charges in both years. "Denali’s revenues and earnings continue to show strong growth as a result of both operational improvements and acquisitions," stated Edward de Boer, president and chief executive officer. "Denali’s fiberglass-reinforced plastic underground tank business is strong, resulting primarily from demand in new construction, and the order inquiry rate for corrosion-resistant products associated with the pulp and paper and power markets have shown nice growth in this quarter. Though impacting reported earnings, the new credit facility that we entered into in early January significantly increases Denali’s acquisition capabilities and operational flexibility and will be instrumental in our future growth." "In March, Denali announced the letter of intent under which Denali would purchase the outstanding shares of Welna N.V. (Amsterdam Stock Exchange). We have completed our due diligence work, financial commitments are in place, and anticipate closing in early July 1999." 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. Denali Incorporated is headquartered in Houston, Texas, and markets its products nationally through its subsidiaries Containment Solutions (Houston), Ershigs (Bellingham, WA), Fibercast (Tulsa, OK), SEFCO (Tulsa, OK), Plasti-Fab (Tualatin, OR), and Belco (Belton, TX). Welna N.V., a 120-year-old company, operates through two divisions. Welna Kunststoffen B. V. designs, manufactures, and installs all forms of FRP pipe systems, vessels and other related equipment requiring high levels of corrosion resistance. Welna Handel B.V. is a trading firm that specializes in high quality products and engineered systems for power generation, water treatment, and paper and chemical processing industries. Welna N.V. is headquartered in Oldenzaal, The Netherlands, and markets its products through its subsidiaries in The Netherlands, Germany, United Kingdom, Belgium, Sweden, France, and Poland. For more information on Denali Incorporated, please contact Mel Carter, vice president of business development, at 713.627.0933, or visit the Denali Incorporated Website at www.denaliincorporated.com. NOTE: 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. DENALI INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended Nine months ended March 27, March 28, March 27, March 28, 1999 1998 1999 1998 (In thousands, except per share amounts) Net sales $ 36,328 $ 21,587 $ 110,216 $ 68,480 Cost of sales 27,667 17,302 82,649 53,634 Gross profit 8,661 4,285 27,567 14,846 Selling, general and administrative expenses 7,065 3,972 20,571 12,218 Non-recurring compensation expense - - 682 2,312 Operating income 1,596 313 6,314 316 Interest expense 925 209 2,210 1,302 Interest income (23) (58) (35) (105) Other income, net (66) (52) (173) (278) Income (loss) before income taxes 760 214 4,312 (603) Income tax expense 284 79 1,635 647 Net income (loss) before extraordinary item 476 135 2,677 (1,250) Extraordinary income (loss) on early extinguishment of debt, net of income tax (281) 238 (281) 219 Net income (loss) 195 373 2,396 (1,031) Dividends on Series A Preferred Stock - - - (30) Net income (loss) attributable to common stock $ 195   $ 373   $ 2,396   $ (1,061)       Net income (loss) per common share: Income (loss) before extraordinary item $ 0.10 $ 0.03 $ 0.55 $ (0.38) Extraordinary item (0.06) 0.05 (0.06) 0.07 Net income (loss) per common share $ 0.04   $ 0.08   $ 0.49   $ (0.31) Net income (loss) per common share assuming dilution: Income (loss) before extraordinary item $ 0.10 $ 0.03 $ 0.55 $ (0.38) Extraordinary item (0.06) 0.05 (0.06) 0.07 Net income (loss) per common share               assuming dilution $ 0.04   $ 0.08   $ 0.49   $ (0.31) Net income (loss) per common share assuming dilution and excluding (1) non-recurring compensation expense associated with the exchange of certain employee stock options in fiscal year 1998, (2) the salary continuation agreement in fiscal year 1999, and (3) extraordinary income (loss) on early extinguishment of debt net of income tax: $ 0.10 $ 0.03 $ 0.64 $ 0.30    DENALI INCORPORATED CONSOLIDATED BALANCE SHEET March 27, 1999 ($ Thousands) (Unaudited)  March 27, 1999 Assets:   Cash & S-T Investments 107 Net Receivables 24,219 Net Inventory 15,665 Other Current 3,378 Current Assets 43,369     Net PP&E 21,917     Assets Held for Sale 449 Goodwill 25,835 Other Long-term Assets 4,893   Total Assets 96,463   Liabilities & Equity:   Accounts Payable 13,323 Accrued Liabilities/Taxes 10,073 Notes Payable/Current Maturities of L-T Debt 4,000 Current Liabilities 27,396     Long-term Debt 36,160 Other Long-term Liabilities 728 Preferred Stock 0 Total Liabilities 64,284   Total Equity 32,179   Total Liabilities and Equity 96,463

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