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
May 8, 1998 (May 1, 1998) Date of
Report (Date of earliest event reported)
DT INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
Delaware
(State or other jurisdiction of incorporation)
0-23400 44-0537828
(Commission File Number) (I.R.S. Employer Identification No.)
1949 East Sunshine, Suite 2-300, Springfield, MO 65804
(Address of principal executive offices)
(Zip Code)
(417) 890-0102
(registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
On May 1, 1998, DT Industries, Inc. (the "Company") completed the sale of its
Knitting elements division to a strategic buyer for approximately $9.4 million.
Proceeds of the sale were used to reduce outstanding debt. The division, which
manufactured precision wear parts for industrial knitting machines and was part
of the Components segment, had fiscal 1997 sales of approximately $9.4 million.
DT Industries incurred a one-time operating charge of approximately $1.4 million
related to the sale.
On May 8, 1998, the Company released its earnings for the three and nine month
periods ended March 29,1998.
Statements contained in the attached press release that are not historical facts
are forward-looking statements that are subject to the safe harbor provisions of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. References to "expectations,"
"opportunities," "potential" and "goals" in the attached press release indicate
such forward-looking statements. Actual results could differ materially from
those anticipated in any forward-looking statements as a result of various
factors, including economic downturns in industries served, delays or
cancellations of customer orders, delays in shipping dates of products,
significant cost overruns on certain projects, foreign currency exchange rate
fluctuations and delays in achieving anticipated cost savings or in effectively
correcting production inefficiencies and capacity issues and expanding into
additional markets and possible future acquisitions that may not be
complementary or additive.
Item 7. Financial statements, pro forma financial information and exhibits
(a) Press Release of the Company dated May 8, 1998.
<PAGE>
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.
DT INDUSTRIES, INC.
Date: May 8, 1998 by /s/ Bruce P. Erdel
------------------------------------
Bruce P. Erdel
Vice President - Finance and Secretary
<PAGE>
EXHIBIT INDEX
Page no. in
Sequential
Exhibit No. Description Numbering System
- ----------- ----------- ----------------
99 Press Release of the Company
dated May 8, 1998.
<PAGE>
DT Industries, Inc.
1949 E. Sunshine
Suite 2-300
Springfield, MO 65804
Nasdaq: DTII
At the Company: At The Financial Relations Board:
Bruce P. Erdel Karl Plath Marnie Freitag
Vice President, Finance General Information Analyst Contact
417/890-0102 312/640-6738 312/640-6768
FOR IMMEDIATE RELEASE
DT INDUSTRIES' 3RD-QTR NET INCOME UP 18.6% BEFORE CHARGE,
DILUTED EPS 68 CENTS VS. 61 CENTS ON FEWER SHARES IN 1997
Company Takes One-Time Charge On Sale Of Non-Core Knitting Elements Division
SPRINGFIELD, Mo., May 8, 1998--DT Industries, Inc. (Nasdaq: DTII) today reported
that net income before a non-recurring charge related to the divestiture of its
non-core Knitting Elements business increased 18.6 percent to $8.6 million, or
68 cents per share on a diluted basis, compared with $7.2 million, or 61 cents
per share, on fewer shares outstanding a year earlier. After a $0.9 million
charge, net of tax, related to the sale of the Knitting Elements division, the
company reported net income of $7.7 million, or 62 cents per diluted share.
Net sales for the quarter ended March 29, 1998, increased 28.3 percent to
$132.6 million compared with $103.4 million for the prior-year quarter. Backlog
was $239.4 million compared with a backlog of $180.2 million in the 1997 third
quarter.
For the nine months ended March 29, 1998, net income--before the 1998
charge related to the Knitting Elements division sale and extraordinary losses
related to debt refinancing in 1998 and 1997--was $23.3 million, or $1.87 per
diluted share, compared with $18.1 million a year earlier. After all charges,
net income was $21.3 million, or
<PAGE>
DT Industries, Inc.
Add -1-
$1.72 per diluted share, compared with $17.8 million, or $1.67 per diluted
share, the prior year.
Expects Fourth Quarter Similar To Third
"Although we are pleased with overall operating results year to date, the
backlog at the end of the quarter and third-quarter orders were less than we
expected" said Stephen J. Gore, president and chief executive officer. "This was
due largely to timing issues, softness in the automotive industry and ongoing
softness with a significant Automation customer that continues to affect sales
at our Mid-West Automation division. Additionally, margins in our Components
segment continue to be lower than we would like.
"Because of these factors and the divestiture of the Knitting Elements
division, we expect fourth-quarter results to be about the same, or slightly
better than, the third quarter," Gore said. "We are encouraged by the broadened
customer base at Mid-West Automation, although the smaller orders that division
has booked have not yet made up for the softness in orders from the significant
customer, which we expect to continue in the near term. In the Components
segment, our recently bolstered management team is taking positive steps to
correct production inefficiencies and capacity issues, and we expect to see
improvements in operating margins in fiscal 1999."
Longer-Term Growth Outlook Favorable
"Growth prospects for our overall business remain good," Gore said. "As I
mentioned, we have experienced some softening in automotive component systems
and drive-train equipment, largely the result of auto makers assessing strategic
alternatives for their captive component suppliers and general consolidation
among tier-one suppliers that has led to some caution in capital spending. This
does, however, represent a longer-term opportunity for improved sales to this
market."
Gore also noted expansion in several other markets, including medical
devices, plastics, glass processing, electrical, cosmetics, pharmaceuticals,
tire manufacturing, consumer product paper goods and other consumer products.
Strong Sales In Packaging Systems
"Quarterly sales in our largest segment, Special Machines, increased $29.3
million, with about $27.0 million in incremental sales from acquired
businesses," Gore said. "The $2.3 million increase from existing businesses was
primarily the result of strength in sales of packaging systems, including
thermoforming and extrusion systems and pharmaceutical packaging lines. Assembly
automation system sales were down slightly, reflecting the softness in sales to
the significant customer, offset substantially by strong sales in welding
systems and build-to-print machines.
<PAGE>
DT Industries, Inc.
Add -2-
"Results for the Components segment continue to reflect gains in sales to
customers in the agricultural equipment and transportation industries," Gore
said. "These increases, however, were offset by decreased sales to customers in
other industries."
Operating Income Increases
Third-quarter operating income before the non-recurring charge increased
$1.9 million, or 12.5 percent, to $16.8 million from $14.9 million for the
prior-year quarter. Operating margin before the non-recurring charge decreased
to 12.7 percent from 14.5 percent in the prior year, the result of acquired
businesses, which have lower margins than DT Industries' historical levels, a
decrease in gross margin and an increase in selling, general and administrative
expenses.
SG&A increased $4.9 million to $19.7 million for the quarter. Most of the
increase resulted from acquired businesses, with the remaining increase largely
associated with the overall growth of the company, depreciation and sales
commissions.
Knitting Elements Division Sold
The company completed the sale of its non-core Knitting Elements division
on May 1, 1998, to a strategic buyer for approximately $9.4 million. Proceeds of
the sale were used to reduce outstanding debt. The division, which manufactured
precision wear parts for industrial knitting machines and was part of the
Components segment, had fiscal 1997 sales of approximately $9.0 million. DT
Industries incurred a one-time operating charge of approximately $1.4 million
related to the sale.
Continued Focus On Strategic Initiatives
"We continue to implement a number of process improvements that we believe
will continue to produce cost savings," Gore said. "Our project management
systems, core business systems and strategic sourcing programs all are designed
to maximize efficiencies.
"We also are concentrating on expanding our business by acquiring new
customers--as we have in computer-related electronics, personal care and medical
devices, among several others--and strategic acquisitions," Gore said. "We have
several acquisition candidates at varying phases of consideration for both our
Automation and Packaging systems groups.
"Overall, we remain committed to diversifying our end-user markets and
forging additional strategic alliances with Fortune 500 companies."
DT Industries, Inc. is a leading designer, manufacturer and integrator of
automated production systems used to assemble, test or package industrial and
consumer products. The company also produces precision metal components, tools
and dies for a broad range of industrial applications.
<PAGE>
DT Industries, Inc.
Add -3-
Certain statements included herein are forward-looking statements. The
company's actual results for such periods could differ materially from the
expected results if the company experiences delays or cancellations of customer
orders, delays in shipping dates of products, cost overruns on certain projects,
currency exchange fluctuations or other factors described in the company's
filings with the U.S. Securities and Exchange Commission.
Financial tables follow....
For further information on DT Industries by fax, at no cost,
dial 1-800-PRO-INFO and use ticker symbol "DTII."
<PAGE>
DT Industries, Inc.
Add -4-
DT INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands except share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
<S> <C> <C> <C> <C>
March 29, March 30, March 29, March 30,
1998 1997 1998 1997
---------------- ----------------- ------------------ -----------------
Net sales $ 132,561 $ 103,359 $ 380,756 $ 286,687
Cost of sales 96,054 73,652 277,364 206,545
---------------- ----------------- ------------------ -----------------
Gross profit 36,507 29,707 103,392 80,142
Selling, general and
administrative expenses 19,680 14,755 55,898 40,105
Loss on sale of assets of
Knitting Elements division 1,383 - 1,383 -
---------------- ----------------- ------------------ -----------------
Operating income 15,444 14,952 46,111 40,037
Interest expense, net 1,546 2,538 5,102 8,825
Dividends on company-obligated,
mandatorily redeemable convertible
preferred securities 1,253 - 3,759 -
---------------- ----------------- ------------------ -----------------
Income before provision for income
taxes and extraordinary loss 12,645 12,414 37,250 31,212
Provision for income taxes 4,931 5,198 14,773 13,085
---------------- ----------------- ------------------ -----------------
Income before extraordinary loss 7,714 7,216 22,477 18,127
Extradordinary loss on debt
refinancing less applicable
income tax benefits of $800
and $216, respectively - - 1,200 324
---------------- ----------------- ------------------ -----------------
Net Income $ 7,714 $ 7,216 21,277 17,803
================ ================= ================== =================
Basic earnings per common share:
Income before extraordinary loss
$ 0.68 0.64 1.99 1.81
Extraordinary loss - - 0.11 0.03
================ ================= ================== =================
Net income $ 0.68 0.64 1.88 1.78
================ ================= ================== =================
Diluted earnings per common and
common equivalent share:
Income before extraordinary loss
$ 0.62 0.61 1.81 1.70
Extraordinary loss - - 0.09 0.03
---------------- ----------------- ------------------ -----------------
Net income $ 0.62 0.61 1.72 1.67
================ ================= ================== =================
Weighted average number of common and
common equivalent shares outstanding:
Basic 11,341,028 11,267,771 11,321,735 10,033,789
Diluted 13,726,289 11,882,622 13,671,794 10,633,899
================ ================= ================== =================
</TABLE>
<PAGE>
DT Industries, Inc.
Add -5-
DT INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(dollars in thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
March 29, June 29,
1998 1997
(Unaudited)
------------------ ----------------
Assets
Current assets:
Cash and cash equivalents $ 4,543 $ 2,821
Accounts receivable, net 69,222 68,538
Costs and estimated earnings in excess of amounts billed
on uncompleted contracts 60,960 51,643
Inventories, net 60,708 42,198
Prepaid expenses and other 11,082 7,051
------------------ ----------------
Total current assets 206,515 172,251
Property, plant and equipment, net 67,109 51,132
Goodwill, net 184,965 168,401
Other assets, net 6,287 3,412
------------------ ----------------
$ 464,876 $ 395,196
================== ================
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 57 $ 1,527
Accounts payable 31,121 31,353
Customer advances 30,200 18,404
Accrued liabilities 47,432 29,986
------------------ ----------------
Total current liabilities 108,810 81,270
------------------ ----------------
Long-term debt 68,666 46,978
Deferred income taxes 5,472 6,435
Other long-term liabilities 5,455 5,246
------------------ ----------------
Total long-term obligations 79,593 58,659
------------------ ----------------
Company-obligated, mandatorily redeemable convertible
preferred securities of subsidiary DT Capital Trust 70,000 70,000
------------------ ----------------
Stockholders' equity:
Preferred stock, $0.01 par value; 1,500,000 shares
authorized; no shares issued and outstanding
Common stock, $0.01 par value; 100,000,000 shares
authorized; 11,360,362 and 11,300,875 shares issued and
outstanding at March 29, 1998 and June 29, 1997, respectively 113 113
Additional paid-in capital 134,389 133,370
Retained earnings 72,383 51,784
Cumulative translation adjustment
(412) -
------------------ ----------------
Total stockholders' equity 206,473 185,267
------------------ ----------------
Total liabilities and stockholders' equity $ 464,876 $ 395,196
================== ================
</TABLE>
