PEMBROKE PINES, Fla., May 12 /PRNewswire-FirstCall/ -- Decorator Industries, Inc. today announced its operating results for the first quarter ended March 29, 2008.
Decorator, a leading supplier of interior furnishings for recreational vehicles ("RV"), manufactured housing ("MH") and the hospitality industry, today reported a net loss of $475,518, or $0.16 per diluted share for the first quarter ended March 29, 2008, compared to a net loss of $91,929, or $0.03 per diluted share in the same quarter one year ago.
Mr. Johnson, President, stated:
The continuing downturn in two of our markets negatively impacted our sales and income in the first quarter of 2008. Net sales for the first quarter decreased 14% to $10,503,898 compared to $12,247,417 for the first quarter of 2007. Sales to our RV customers were $4,820,000, a decrease of 35% from $7,384,000 in last year's first quarter. Sales to MH customers increased by 25% to $2,391,000 from $1,914,000 in last year's first quarter; this includes sales from our Doris Lee acquisition on November 30, 2007. Sales to our existing MH customers declined 12% to $1,683,000 from $1,914,000 in the first quarter of 2007. Hospitality sales increased 12% to $3,293,000 from $2,949,000; this includes $425,000 in sales from our Superior Drapery acquisition of June 1, 2007.
The RV industry reported that total RV wholesale shipments declined 12% in the first quarter of 2008 from last year's first quarter. Towable RV shipments, primarily travel trailers, declined by 9% while motor home shipments decreased about 25% from the first quarter of 2007. The MH industry reported that wholesale shipments for this year's first quarter decreased by 3% from a year ago.
Conditions for the RV and MH markets continue to become more challenging. The RV market is expected to produce negative comparisons over the remainder of the year while the MH market has also weakened and is expected to finish the year with fewer shipments than 2007. Rising fuel prices and uncertainty in the economy have negatively impacted retail sales of RVs, causing dealers to adjust inventories and hold off ordering newer models. The MH market continues to experience weak retail purchases largely due to the constrained availability of consumer credit. Spring and summer have traditionally been the prime selling seasons for both the RV and MH markets; current economic and market conditions do not indicate that this will be a favorable selling season. The Hospitality market continues to show growth which is reflected in the increased order flow we are currently experiencing. This increased order flow should impact us favorably over the balance of the year.
The operating loss increased to $768,518 or 7.3% of net sales in 2008 from $141,929 or 1.2% of net sales in the first quarter of 2007. The increased loss was caused by reduced sales volumes, labor inefficiencies and increased fixed costs from our recent acquisitions.
We are disappointed with the results and are evaluating plans to improve our performance as we move forward. We will continue to aggressively work on growing our hospitality market as this presents our best growth opportunity. We have faced these types of challenges before and we are confident that we will take the necessary actions that will enable us to remain a financially strong company providing growth and profitability. As always, we seek opportunities to grow our business through market diversification, geographic expansion and acquisition.
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, THE AVAILABILITY OF CONSUMER CREDIT, FUEL PRICES, 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 TO THE MANUFACTURED HOUSING AND RECREATIONAL VEHICLE MARKETS AND IS A GROWING SUPPLIER TO THE LODGING INDUSTRY.
(DIIG) THE UNAUDITED FIGURES ARE AS FOLLOWS: STATEMENT OF INCOME FOR QUARTERS ENDED: March 29, 2008 March 31, 2007 NET SALES $10,503,898 $12,247,417 COST OF PRODUCTS SOLD 9,007,688 10,317,008 GROSS PROFIT 1,496,210 1,930,409 SELLING AND ADMINISTRATIVE EXPENSES 2,254,076 2,072,278 OPERATING LOSS (757,866) (141,869) OTHER INCOME (EXPENSE) Interest, Investment and Other Income 19,449 23,201 Interest Expense (30,101) (23,261) LOSS BEFORE INCOME TAXES (768,518) (141,929) PROVISION FOR INCOME TAXES (293,000) (50,000) NET LOSS $(475,518) $(91,929) EARNINGS (LOSS) PER SHARE: BASIC $(0.16) $(0.03) DILUTED $(0.16) $(0.03) WEIGHTED-AVERAGE NUMBER OF SHARES OUTSTANDING BASIC 2,936,556 3,001,228 DILUTED 2,936,556 3,001,228 CONDENSED BALANCE SHEET March 29, 2008 December 29, 2007 CASH AND EQUIVALENTS $16,504 $17,544 ACCOUNTS RECEIVABLE 3,767,569 3,423,072 INVENTORIES 5,503,927 5,181,645 OTHER CURRENT ASSETS 999,407 868,371 TOTAL CURRENT ASSETS 10,287,407 9,490,632 NET PROPERTY AND EQUIPMENT 9,199,992 9,283,489 OTHER ASSETS 5,297,392 5,489,783 TOTAL ASSETS $24,784,791 $24,263,904 TOTAL CURRENT LIABILITIES $6,244,636 $5,577,253 LONG-TERM DEBT 2,464,000 1,409,000 DEFERRED TAXES 582,000 866,000 STOCKHOLDERS' EQUITY 15,494,155 16,411,651 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $24,784,791 $24,263,904
