Denali Fourth Quarter Results Up Over 20%
HOUSTON - Denali Incorporated (NASDAQ:DNLI) today announced record net income, earnings per diluted share, and revenues for the fiscal fourth quarter and its fiscal year 1999 ending July 3, 1999.
For the fiscal fourth quarter and relative to the same period last year, the Company reported an increase of 27% in net income, 25% in earnings per diluted share, and 23% in revenues. For the fiscal 1999 fourth quarter, net income was $1.7 million, or $.35 per diluted share on $38.5 million in revenue. Net income for the fourth quarter fiscal year 1998 was $1.4 million, or $.28 per diluted share, on $31.4 million in revenue.
For fiscal year 1999 and relative to fiscal year 1998, the Company reported an increase of 99% in net income, 60% in earnings per diluted share, and 49% in revenues, excluding the impact of non-recurring charges and extraordinary items.
For fiscal year 1999, net income increased 99% from the prior year to $4.8 million, excluding non-recurring compensation expense associated with a salary continuation agreement of $682,000, or $.09 per diluted share, and an extraordinary loss from the early retirement of debt of $281,000, or $.06 per diluted share. Fiscal year 1998 net income was $2.4 million, excluding non-recurring compensation expense of $2.3 million, or $.60 per diluted share, and an extraordinary gain of $219,000, or $.06 per diluted share.
Earnings per diluted share rose 60% to $.99 in fiscal year 1999 as compared to $.62 in the prior fiscal year, excluding non-recurring charges and extraordinary items. Revenues for fiscal year 1999 increased 49% to $148.8 million compared to $99.9 million from the prior fiscal year. The Company's operating income more than doubled to $10.6 million as compared to $4.8 million in the prior year, excluding the non-recurring compensation expense. Earnings before interest expense, taxes, depreciation, amortization and non-recurring expense, or EBITDA, more than doubled to $14.5 million compared to $7.1 million in the prior fiscal year. The record financial results can be attributed to the Company's strong internal revenue growth, operational improvements, and the success of its acquisition program.
"Continuing to execute our strategic plan to become the leading provider of fluid handling products and solutions has resulted in significant growth in revenues, operating margins and earnings per share," stated Edward de Boer, president and chief executive officer. "We are particularly pleased with our operational improvements. Gross margins made impressive gains over the fiscal year increasing from 22.6% to 25.4% of revenues, and operating income grew from 4.8% to 7.1% of revenue."
"Denali Incorporated has continued to produce exceptional operational and financial results. Over the last four years, the Company has grown revenues and net income at over 40% compounded annually. During the fiscal year, in addition to our operational improvements and internal revenue growth, we completed three significant acquisitions, including Welna, N.V. on July 1, 1999. Based in The Netherlands, Welna is Europe's leading supplier of engineered fiberglass-reinforced plastic ("FRP") products for process industries and has manufacturing facilities in key technology centers in The Netherlands, Germany, France, the United Kingdom, Poland, and Thailand," noted de Boer.
"The combination of Denali and Welna creates the world's largest manufacturer of specialty-engineered, corrosion-resistant FRP products serving the chemical, petrochemical, water/wastewater, power generation, pulp and paper, and other process industries. Pro forma revenues of the Company are approximately $230 million, with over 35% generated outside of the United States," said de Boer. "The acquisition of Welna and the expansion into international markets was a key step toward achieving our goal of becoming the world's leading provider of fluid handling products and solutions. Also, we believe the fragmented nature of the fluids handling industry, which is comprised of many companies with limited product ranges or geographic areas served, will continue to create acquisition opportunities that compliment our existing businesses."
Denali Incorporated is a provider of fluid handling products, specializing in corrosion-resistant applications in process industries. The company is a manufacturer of engineered fiberglass-composite products, including tanks, vessels, and piping systems, as well as steel, aboveground storage tanks. The company also distributes a wide range of engineered products and systems. Denali Incorporated is headquartered in Houston, and markets its products worldwide through its subsidiaries Containment Solutions (Houston); the Specialty Solutions companies (headquartered in Tulsa) of Ershigs, Fibercast, Belco, and SEFCO; and the Welna companies of Plasticon and Welna Trade (The Netherlands and Germany), Metalchem (Poland), Garlway (The United Kingdom), and Sovap (France).
For more information on Denali Incorporated, please contact Mel Carter, vice president of business development, at 713/627-0933, or visit the Denali Incorporated Website at www.denaliincorporated.com.
NOTE: This news release contains certain forward-looking statements as such term is defined in the Private Securities Litigation Reform Act of 1995 and information relating to the company and its subsidiaries that are based on the beliefs of the company's management as well as assumptions made by and information currently available to the company management. When used in this report, the words, "anticipate", "believe", "estimate", "expect", and "intend" and words or phrases of similar import, as they relate to the company or its subsidiaries or company management, are intended to identify forward-looking statements. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, competitive factors, general economic conditions, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, seasonality, distribution networks, product introductions and acceptance, technological change, changes in industry practices, onetime events and other factors described herein. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended.