EX-99.1 3 c82838exv99w1.txt PRESS RELEASE DATED 2/11/04 EXHIBIT 99.1 NEWS BULLETIN FROM: [DT LOGO] 907 West Fifth Street Dayton, OH 45407 -------------------------------------------------------------------------------- FOR FURTHER INFORMATION: AT THE COMPANY: AT FINANCIAL RELATIONS BOARD JOHN M. CASPER LISA FORTUNA CHIEF FINANCIAL OFFICER LFORTUNA@FINANCIALRELATIONSBOARD.COM (937) 586-5600 (312) 266-7800 FOR IMMEDIATE RELEASE WEDNESDAY, FEBRUARY 11, 2004 DT INDUSTRIES REPORTS SECOND QUARTER 2004 RESULTS; CONVERTING TECHNOLOGIES AND PACKAGING SYSTEMS DIVISIONS REPORTED AS DISCONTINUED OPERATIONS -------------------------- DAYTON, OH, FEBRUARY 11, 2004 -- DT INDUSTRIES, INC. (NASDAQ: DTII), an engineering-driven designer, manufacturer and integrator of automated systems and related equipment used to assemble, test or package industrial and consumer products, today reported a net loss of $16.7 million, or $0.70 per share, for the quarter ended December 28, 2003 compared to a net loss of $8.1 million, or $0.34 per share, in the corresponding prior year period. The net loss in the current period included a $9.3 million loss, or $0.38 per diluted share, from discontinued operations, including the write-down of the net assets to fair market value of $3.1 million on the Converting Technologies division and $7.1 million on the Packaging Systems division. The loss from continuing operations for the quarter ended December 28, 2003 was $7.4 million, or $0.32 per diluted share, compared to a loss from continuing operations of $6.5 million, or $0.29 per diluted share, for the prior year quarter. The Company reported a net loss for the six months ended December 28, 2003 of $24.4 million, or $1.03 per share, compared with a net loss of $9.3 million, or $0.39 per share, in the comparable period of fiscal 2003. The loss from continuing operations for the six months ended December 28, 2003 was $15.2 million, or $0.67 per diluted share, compared to a loss from continuing operations of $7.3 million, or $0.34 per diluted share, in the prior year comparable period. Net sales decreased 14% to $40.2 million for the quarter ended December 28, 2003 compared to sales of $46.7 million for the second quarter of fiscal 2003. The Company realized a gross margin of 9.7% on sales in the second quarter of fiscal 2004 compared to 12.3% in the prior year period. For the six months ended December 28, 2003, DTI posted net sales of $75.4 million compared with net sales of $102.4 million in the prior year, a decrease of approximately 26%. Gross margin was 10.4% for the six months ended December 28, 2003 compared to 15.9% in the comparable period of fiscal 2003. MORE DT INDUSTRIES, INC. ADD 1 Second quarter 2004 order in-flow was $33.7 million, down from $44.4 million in the second quarter of the prior year and $36.5 million in the first quarter of fiscal 2004. Backlog at December 28, 2003 was $68.5 million, compared to $105.2 million a year earlier and $73.8 million at the end of fiscal 2003. SECOND QUARTER EVENTS In December 2003 the Company entered into an agreement to sell the assets of its Converting Technologies division (previously included in the Material Processing segment) and executed a non-binding letter of intent to dispose of its Packaging Systems business segment. The Company has presented the assets, liabilities and operating results of these entities as discontinued operations in the financial statements. The sale of the Converting Technologies assets was completed on January 16, 2004. The Company received net proceeds of approximately $5.9 million from the sale, which were used to reduce the Company's indebtedness to its senior lenders. The Company expects to sell the assets of the Packaging Systems segment prior to the end of March 2004. During the recently completed quarter, operating results were negatively impacted by the low sales levels and project margin degradations, resulting in a decline in the Company's gross margin to 9.7% during the second quarter of fiscal 2004 compared to a 12.3% gross margin achieved in the second quarter of the prior year. This decline is primarily due to the Company's fixed costs being spread over a lower level of sales and an unfavorable change in product mix. The decrease in sales was primarily in the Company's higher margin product lines. As noted below, results from the Company's Material Processing segment were heavily impacted by the lower customer order activity. Sales decreased $15.8 million, or 59%, in the quarter ended December 28, 2003 versus the prior year comparable quarter and operating losses increased by $2.1 million. The lower sales primarily resulted from a decrease in business from repeat customers within the electronics and appliance industries. Selling, general and administrative expense was $8.7 million or $0.2 million lower than in the second quarter of fiscal 2003, reflecting cost reduction measures taken during the latter half of fiscal 2003 offset by increased directors and officers insurance premiums and legal and professional fees associated with the senior credit facility. Restructuring charges were approximately $0.6 million in the second quarter of fiscal 2004 associated with future lease commitments, while charges were $1.7 million in the comparable period of fiscal 2003 associated with the closing of the Erie, Pennsylvania facility. SEGMENT DATA The Material Processing Segment experienced a decrease in sales to $10.9 million in the second quarter of fiscal 2004 compared to sales of $26.7 million in the second quarter of fiscal 2003, while the operating loss on those sales increased by $2.1 million to a loss of $3.1 million. A reduction in orders from a long-term electronics customer contributed $9.9 million to the sales decline. The operating margin decreased to a loss of 28.4% from a loss of 3.8%. MORE DT INDUSTRIES, INC. ADD 2 Backlog at the end of the current quarter was $29.0 million compared to $58.2 million at the end of the second quarter last year and $27.2 million at the end of fiscal year 2003. Backlog was negatively impacted by the lower order level and by the previously announced fourth quarter of fiscal 2003 contract termination by a customer purchasing the Company's Earthshell(R) equipment. The Assembly and Test Segment, which serves primarily the auto, truck and heavy equipment industries, saw its sales increase to $29.3 million during the current quarter compared to $20.0 million in the prior year's quarter. The segment reported operating income of $0.9 million in second quarter of fiscal 2004 compared to an operating loss of $2.1 million in the year earlier period. Sales and operating profit were positively impacted by the timing of revenue recognition under percentage of completion accounting on a few large automotive projects. Backlog at the end of the quarter was $39.5 million compared to $47.0 million at the end of the second quarter last year and $46.6 million at the end of fiscal year 2003. OUTLOOK Stephen Perkins, President and Chief Executive Officer, stated, "Our operating performance during the second quarter reflects the challenging market conditions that exist for the capital goods sector. The current quarter's sales reflect increases in automotive related sales but the continued softness in our core electronics market. We continue to pursue new customers to replace the decrease in electronics related sales. While we have been successful in lowering certain of our fixed costs, including having all employees accept compensation and company-paid benefit reductions, the significant reduction in orders/sales has more than offset our cost reduction efforts. We will continue our focus on cost containment and, more importantly, performance to improve our operating results." FINANCING The Company announced that it is in continuing negotiations with its senior lenders with respect to a forbearance agreement addressing the Company's payment defaults as of December 30, 2003 and January 30, 2004 and its failure to meet the minimum net worth covenant as of December 28, 2003. The Company has no borrowing availability under its senior credit facility and is operating through the management of its cash. The Company continues to seek long-term financing to replace its senior credit facility which matures on July 2, 2004. CONFERENCE CALL DT Industries has scheduled its quarterly conference call for February 11 at 11 a.m. EST, which will be webcast on the Internet by Vcall. To attend this virtual conference, log in at http://www.vcall.com. Please access the site at least 15 minutes prior to the scheduled start time in order to download the required audio software. To participate in the live audio call, dial 706-634-1012 or 800-437-4632 at least 5 minutes before start time. A replay of the webcast will be accessible on the Vcall website for one week. A replay of the call will also be available until 12:00 midnight EST on February 18, 2004, by dialing 706-645-9291. The confirmation number for the replay is 5387988. MORE DT INDUSTRIES, INC. ADD 3 Certain information contained in this press release includes forward-looking statements made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These statements comprising all statements herein that are not historical reflect the Company's current expectations and projections about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our interpretation of what we believe to be significant factors affecting our businesses, including many assumptions regarding future events. References to the word "expect" and similar expressions used herein indicate such forward-looking statements. Our actual results, performance, liquidity, financial condition, prospects and opportunities could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including the amount and availability of, and our ability to comply with restrictions and covenants relating to indebtedness under our senior credit facility, our ability to effectively manage our cash to meet our liquidity and debt reduction needs through July 2, 2004, our ability to refinance or further extend our senior credit facility in order to meet our liquidity needs and continue as a going concern after July 2, 2004, our ability to complete the sale of the Packaging Systems division and other factors under "Business - Risks Related to Our Business" described in our Form 10-K for the fiscal year ended June 29, 2003, as filed with the SEC. You should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason. -FINANCIAL TABLES TO FOLLOW- MORE DT INDUSTRIES, INC. ADD 4 DT INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED) --------------------------------------------------------------------------------

MORE DT INDUSTRIES, INC. ADD 5 DT INDUSTRIES, INC. CONSOLIDATED STATEMENT OF OPERATIONS (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED) --------------------------------------------------------------------------------

MORE DT INDUSTRIES, INC. ADD 6 Net sales for the Company's reportable segments for its continuing operations consisted of the following:

The reconciliation of segment operating income (loss) to consolidated loss from continuing operations before income taxes consisted of the following:

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DT INDUSTRIES INC 8-K