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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MAY 5, 1998
DRYPERS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-23422 76-0344044
(State of Incorporation) (Commission File No.)(IRS Employer Identification No.)
5300 MEMORIAL, SUITE 900
HOUSTON, TEXAS 77007
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 869-8693
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ITEM 5. OTHER EVENTS
On April 6, 1998, Drypers Corporation ( the "Company") exercised its option
to acquire the remaining interest in the parent company of Chansommes do Brasil
Ind. e Com. Ltda., the Brazilian contract manufacturer of its diapers. This
transaction is subject to approval by the Brazilian government. This
acquisition gives the Company a 100% ownership interest in the Brazilian
manufacturing facility.
A copy of the Company's press release dated April 24, 1998, which describes
the foregoing is filed as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
The following document is filed as an exhibit to this report in accordance
with Item 601 of Regulation S-K.
99.1 Press release of Drypers Corporation dated April 24, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DRYPERS CORPORATION
Dated: May 5, 1998 By: /s/ Walter V. Klemp
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Walter V. Klemp
Chairman of the Board and
Co-Chief Executive Officer
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EXHIBIT 99.1
FOR: Drypers Corporation
APPROVED BY: Walter V. Klemp
Chairman & Co-Chief
Executive Officer
(713) 869-8693
FOR IMMEDIATE RELEASE
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CONTACT: Cheryl Schneider/Tessa Lavender
Press: Michael McMullan
Morgen-Walke Associates
(212) 850-5600
DRYPERS CORPORATION REPORTS FIRST QUARTER 1998 RESULTS
- RECORD FIRST QUARTER NET SALES ACHIEVED -
HOUSTON, TEXAS, April 24, 1998 -- Drypers Corporation (Nasdaq: DYPR) today
reported results for the first quarter ended March 31, 1998.
For the quarter, net sales increased 30.6% to $78.6 million, compared with
$60.2 million for the same period in 1997. In line with previously announced
expectations for the quarter, the Company recorded a net loss of $5.7 million,
or $0.46 per diluted share reflecting costs related to the combination of
advertising and promotional expenses in connection with the national television
campaign for Drypers(R) premium diapers, the launch of the Xclaim detergent
business, and increasing international capacity in developing markets. This
compared to net income of $1.8 million, or $0.11 per diluted share, in the first
quarter of 1997.
Walter V. Klemp, Chairman and Co-Chief Executive Officer, said, "We are
pleased with Drypers' sales growth of nearly 31% in the first quarter, which
reflects 12% and 89% increases in domestic and international sales,
respectively. Excluding our Brazilian business, which began operations in the
first quarter of 1997, international sales increased approximately 25%
reflecting strong growth in Argentina and Mexico. Sales growth in the first
quarter was achieved in spite of lower sales to Asia due to the currency crisis
there and a price war in Mexico initiated by a competitor toward the end of the
quarter."
Terry A. Tognietti, Co-Chief Executive Officer and President of Drypers North
America, commented, "We believe the launch of Drypers' first-ever national
television media campaign in the United States for our premium diapers is
creating tremendous momentum. We saw an increase in our grocery store
penetration to 68% at the end of the first quarter versus 60% in the year-ago
period and 66% at the end of 1997. It's still too early to predict the exact
impact of this campaign, but we know it's having some effect evidenced by the
positive comments and reaction to the commercial."
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DYPR: REPORTS FIRST QUARTER 1998 RESULTS PAGE 2
Mr. Klemp added, "We also recently established a revolving line of credit
with BankBoston, N.A., providing for a maximum credit facility of $50,000,000
for a three year period, which compares to our previous $21,000,000 revolving
line of credit. This is a significant and exciting achievement, as it is a
global line of credit, reflecting the truly global nature of Drypers."
Mr. Klemp concluded, "In conjunction with continued strength in our
international markets, our newly enhanced working capital position in the United
States and our foreign subsidiaries has solidly positioned Drypers to continue
our growth as a global company."
On April 6, 1998, the Company exercised its option to acquire its Brazilian
contract manufacturer of its diapers. This transaction is subject to approval by
the Brazilian government.
Mr. Klemp added, "This acquisition results in Drypers having full control
of our Brazilian manufacturing facility, affording us the opportunity to improve
efficiencies there, which should positively impact on gross margins in future
quarters."
Drypers Corporation manufactures and markets disposable baby diapers and other
consumer products under the Drypers(R) and other brand names. The Company also
produces other branded and private label diapers and related products. The
Company's products are sold through grocery stores and mass merchants throughout
the United States, Latin America and other international markets.
This press release contains, and any oral statements made by the Company
concerning this release may contain, forward-looking statements that involve
assumptions and uncertainties. The Company's actual results could differ
materially. Some of the more significant factors that could cause or contribute
to such differences are noted in the Company's Reports on Form 10-K and 10-Q,
and include, but are not limited to, competitive and economic factors, price
changes by competitors, changes in costs of raw materials, timing of
technological advances by the Company and its competitors, lack of acceptance by
consumers of new products, and fluctuations in currency values and economic
conditions in international markets.
(Financial Table To Follow)
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DRYPERS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except Share and Per-Share Amounts)
Three Months Ended
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March 31, March 31,
1998 1997
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(Unaudited)
NET SALES $ 78,592 $ 60,161
COST OF GOODS SOLD 47,249 36,756
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Gross profit 31,343 23,405
SELLING, GENERAL
& ADMINISTRATIVE EXPENSES 32,477 18,961
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Operating income (loss) (1,134) 4,444
INTEREST EXPENSE, net 3,450 2,198
OTHER INCOME (EXPENSE) 56 (123)
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INCOME (LOSS) BEFORE INCOME
TAX PROVISION (4,528) 2,123
INCOME TAX PROVISION 1,141 150
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NET INCOME (LOSS) (5,669) 1,973
PREFERRED STOCK DIVIDEND 80 168
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NET INCOME (LOSS) ATTRIBUTABLE
TO COMMON STOCKHOLDERS $ (5,749) $ 1,805
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INCOME (LOSS) PER COMMON SHARE:
Basic $ (0.46) $ 0.23
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Diluted $ (0.46) $ 0.11
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COMMON SHARES OUTSTANDING 12,540,053 7,837,778
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COMMON AND POTENTIAL COMMON
SHARES OUTSTANDING 12,540,053 17,924,752
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