DEPCC - Dep Corp (reorganized from Chapter 11) posts profits..
looks good - IMHO.. now at $2.87 - PSR ratio of 0.16
biz.yahoo.com
Thursday May 28, 8:38 am Eastern Time
Company Press Release
Dep Reports Significantly Improved 1998 Third Quarter Results
Fourth Consecutive Profitable Quarter Since Reorganization
LOS ANGELES--(BUSINESS WIRE)--May 28, 1998--DEP Corp. (NASDAQ SmallCap Market:DEPCC), the leading marketer of hair styling gels in the United States, today reported that fiscal 1998 third quarter net income improved substantially to $681,000, or $.10 per share, compared with a loss of ($613,000), or ($.09) per share, for the third quarter of fiscal 1997.
For the first nine months of fiscal 1998, net income was $2.0 million, or $.28 per share, compared with a net loss of ($2.6) million, or ($.39) per share, for the first nine months of fiscal 1997.
Robert Berglass, president and chief executive officer of DEP said, ''This quarter marks our fourth consecutive profitable quarter since emerging from voluntary reorganization under chapter 11. Additionally, our gross profit margins improved and we have more than doubled operating income. We recently entered into a revolving credit facility which reduced long-term debt and established lower base rates of interest for future periods. While we still have our work cut out for us, I am pleased with our progress to date.''
Operating income increased to $2.2 million in the third fiscal quarter 1998 compared with $1.0 million in the third fiscal 1997 quarter. For the first nine months of fiscal 1998, operating income more than doubled to $6.6 million compared with $2.7 million for the same period of fiscal 1997. The company stated that operating income for fiscal 1998 increased as a result of sales of the new, higher margin products such as THEORIE and LE SYSTEME and lower SG&A expenses.
Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the nine months ended April 30, 1998, increased to $8.8 million, up from $5.1 million in the same period of fiscal 1997.
Net sales for the three months ended April 30, 1998, were $26.0 million compared with $28.6 million for the same period ended April 30, 1997. Net sales for the first nine months of fiscal 1998 were $80.3 million compared to $85.7 million for the same period of the prior year. The decline in net sales for fiscal 1998 was primarily attributable to lower sales of AGREE and HALSA and the conversion of two of the company's international markets -- China and Australia -- from direct sales operations to distributorships. As a result, the company recorded primarily royalty income based upon a percentage of sales from these markets in current periods. In prior year periods, the company recorded sales and related expenses. Excluding China and Australia, net sales for the three months ended April 30, 1998, were $25.9 million compared with $27.5 million for the same period of fiscal 1997, and for the first nine months ended April 30, 1998, were $79.9 million compared to $82.4 million for the same period of fiscal 1997.
''We intend to continue our momentum by concentrating on the strength of our hair care business. We will continue to seek ways to increase sales and profits by introducing new line extensions, improving existing product formulations and creating new packaging graphics to enhance each brand's image and shelf presence. For example, we have repositioned and repackaged the HALSA brand emphasizing its natural heritage. We believe that these marketing efforts will increase product sales of the HALSA brand during the fourth quarter and beyond,'' said Berglass.
DEP Corp., the leading marketer of hair styling gels in the United States, develops, manufactures, markets and distributes personal care products under 12 brand names: DEP, L.A. LOOKS, AGREE, HALSA, LILT, THEORIE, NATURES FAMILY, PORCELANA, CUTICURA, LE SYSTEME, TOPOL AND LAVORIS.
All forward looking statements are subject to the risks and uncertainties detailed in the company's filings with the Securities and Exchange Commission.
DEP CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT DATA
(in thousands, except per share data)
(Unaudited) (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
APRIL 30, APRIL 30,
1998 1997 1998 1997
---- ---- ---- ----
Net sales (1) $26,013 $ 28,571 $80,337 $ 85,693
Selling, general &
administrative expenses (2) 13,913 16,304 43,130 49,579
Income from operations 2,152 1,015 6,586 2,708
Interest expense 1,454 1,574 4,727 5,289
Net income (loss) $ 681 ($ 613) $ 1,961 ($ 2,612)
Net income (loss) per share
-- basic and diluted $ 0.10 ($ 0.09) $ 0.28 ($ 0.39)
Weighted average shares outstanding
-- basic 6,876,140 6,876,140 6,876,140 6,643,842
Weighted average shares outstanding
-- diluted 7,038,371 6,894,810 6,956,633 6,693,498
EBITDA $8,779,000 $5,075,000
Cash and cash equivalents $1,073,000 $13,642,000
Depreciation and amortization $2,091,000 $2,398,000
Capital expenditures $733,000 $538,000
Long-term debt, less current portion $49,379,000 $61,899,000
(1) The three and nine months ended April 30, 1997, include $1.1
million and $3.3 million of net sales, respectively, related to
China and Australia which were converted from direct sales
operations to distributorships in 1998.
(2) The nine months ended April 30, 1997, includes $640,000 of
expenses incurred due to the recall of skin care products in
test market.
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Contact:
DEP Corp.
D. Lee Johnson, 310/604-0777
or
Sitrick & Company
Steve Hawkins, 310/788-2850
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