Dailey International Inc. (OTC BB:DALY) - Chapter 11, 05/28/99
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Analysis: Altman Bankruptcy Predictor
Company Name: Dailey International Inc.
Ticker Symbol: OTC BB:DALY
Date of Analysis: 05/29/99
Conducted by: Samuel M. Williams
Vice President
Turnaround & Crisis Management, Inc.
Two Mid America Plaza, Suite 714
Oakbrook Terrace, IL 60181
Tel: 630-990-9718
Fax: 630-990-9693
E-mail: sam@turnrnd.com
turnrnd.com
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Financial Summary, $ Millions (1) 04/30/97A 12/31/97A 12/31/98A 03/31/99Q 05/28/99
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Working Capital, WC 21.94 70.36 40.70 34.22 na
Retained Earnings, RE 23.50 25.17 (87.65) (100.19) na
Earnings B4 Interest & Taxes, EBIT 4.36 14.63 (15.64) (19.38) na
Market Value of Equity, MVE 64.87 101.61 6.60 5.35 na
Book Value of Tot. Liab., BVTL 19.03 143.88 312.36 303.19 na
Total Sales, TS 66.45 114.22 132.32 113.36 na
Total Assets, TA 82.36 209.28 272.17 251.04 na
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Altman's Financial Ratios 04/30/97A 12/31/97A 12/31/98A 03/31/99Q 05/28/99
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X1 = WC/TA 0.27 0.34 0.15 0.14 na
X2 = RE/TA 0.29 0.12 (0.32) (0.40) na
X3 = EBIT/TA 0.05 0.07 (0.06) (0.08) na
X4 = MVE/BVTL 3.41 0.71 0.02 0.02 na
X5 = TS/TA 0.81 0.55 0.49 0.45 na
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Bankruptcy Predictor Index, Z (2) 3.75 1.77 0.04 (0.19) na
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Company Health Assessment (3,4,5) Strong Near Near Near BK
Death Death Death
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Footnotes:
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1. Data obtained from the 04/30/97 10-K, the 12/31/98
10-K (8-mo transition period), & the 03/31/99 10-Q.
MVE was valued at $7.00, $10.88, $0.69, and $0.56
per share, respectively, on 04/30/97, 12/31/97,
12/31/98, & 03/31/99. EBIT and TS are: (1) annual
figures for the 04/30/97 & 12/31/98 analyses, (2)
8-mo transition figures for the 12/31/97 analysis
multiplied times 12/8 for an annualized basis, and
(3) quarterly figures for the 03/31/99 analysis
multiplied times 4 for an annualized basis.
Dailey International Inc. and certain of its
subsidiaries filed petitions for relief under
Chapter 11 of the Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware
on 05/28/99.
biz.yahoo.com
2. Bankruptcy Predictor Index:
Z = (1.2*X1)+(1.4*X2)+(3.3*X3)+(0.6*X4)+(1.0*X5)
3. Company Health Assessment:
Z > 3.0 = Strong
1.8 < Z < 3.0 = In Danger
Z < 1.8 = Near Death
4. The Altman Bankruptcy Predictor is widely used in
the turnaround industry to assess and predict a
company's short-term survival prospects. The model
is named after the renowned Edward I. Altman, Max L.
Heine Professor of Finance at New York University's
Stern School of Business, who published the initial
research back in 1968. According to one scholarly
journal, Altman's Bankruptcy Predictor has proven
consistently accurate over the period of time since
its development. The original samples in Altman's
research displayed accuracy of 95 percent based on
data from approximately one year prior to failure.
The accuracy dropped to 72 percent based on two-year
data. Subsequent tests on firms that have gone
bankrupt since 1968 have shown an accuracy level of
82 to 85 percent.
5. CAUTION!!! This analysis should only be used as an
analytical tool. While it can greatly assist an
investor or stakeholder in identifying weak
companies for further investigation, it should not
be used to the exclusion of other types of
experienced and informed personal evaluation
techniques. Also, please remember that, when using
the Bankruptcy Predictor Model, the recent trend is
the most important indicator of future success or
failure since companies' fortunes rarely turn on a
dime. |
