DT Industries reports losses, strategies for improvement

DT Industries Inc. Sept. 28 reported a fourth quarter net loss of $7.1 million, or 71 cents per diluted share. In the fourth quarter a year earlier the Springfield company reported net income of $8.4 million, or 68 cents per diluted share.

Executives said fiscal 1999 revenues were significantly below the prior year and internal expectations, in part because of the reduction of business from the company's largest customer and diminished capital spending in several other key markets.

DTI recorded $13 million in pre-tax special charges related to cost performance and collection issues on some automation projects, and restructuring charges.

Net sales for the fourth quarter that ended June 27 were $113.5 million, compared with $138.6 million in the 1998 quarter.

Orders during the quarter were $89.7 million and the backlog was $180 million at the end of the period.

For the year that ended June 27, DT Industries reported a net loss of $1.8 million, or 17 cents per diluted share, compared with income before extraordinary loss of $30.9 million, or $2.49 per diluted share for fiscal 1998.

Net sales for the year were $442.1 million compared with $519.3 million a year earlier.

"While this past year has been extremely challenging, we believe that steps we've taken and will continue to take, will put us back on track to much-improved operating results," said Stephen J. Gore, president and chief executive officer.

"However, due to the low fourth-quarter order rate, diminished backlog and continuing uncertainty on timing of orders, significant improvement in operating results will not likely occur until the last half of the year. Currently we expect an order rate of $117 million to $120 million and sales approximating $100 million in our first quarter of fiscal 2000."

As a result of the 1999 financial results, DT Industries said in a release that it was required to negotiate an amendment to its existing credit facility.

The amended facility provides for a $135 million line of credit, which could increase to $140 million if certain cash flow targets are met. The borrowing will be secured by substantially all of the assets of the company and will mature April 2, 2001, according to a company release.

The company said the amended credit facility agreement also requires the deferral of dividend payments to holders of DTI's convertible preferred securities and suspension of common stock dividends. The amendment establishes a revised set of financial covenants and other restrictions including lender approval of all acquisitions.

"Our overall industry has been hit by a number of external factors, including economic uncertainties and over-capacity in many of our major markets, that led to a substantial reduction or delays in order rates despite strong quoting activity," Gore said.

He said the company is focusing on entering new markets, expanding share in existing markets and improving operating efficiency.