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DOLCO PACKAGING CORP. (DPKG) ANNOUNCES THIRD QUARTER RESULTS

 DOLCO PACKAGING CORP. (DPKG) ANNOUNCES THIRD QUARTER RESULTS
 SHERMAN OAKS, Calif., Nov. 20 /PRNewswire/ -- Dolco Packaging Corp. (Dolco) and Olson Industries Inc. (Olson) effected their First Amended Consolidate Plan of Reorganization (Plan) on July 29, 1991. The Plan called for the merger of Olson with and into Dolco and the substantive consolidation of the assets and liabilities of Dolco and Olson on the effective date. The third quarter results reflect this merger as well as the settlement of pre-petition liabilities.
 Dolco's business is cyclical with lower profits or losses occurring in the second and third quarters and higher profits in the first and fourth quarters. Sales for the third quarter of 1991 amounted to $13,500,000 and resulted in a loss of $138,000 or $.17 per share before non-recurring items. Sales for the third quarter of 1990 totaled $16,200,000 and resulted in a loss of $720,000 or $1.10 per share before non-recurring items.
 Sales for the nine months ended Sept. 30, 1991 totaled $42,400,000 and the loss before non-recurring items was $166,000 or $.20 per share while sales for the nine months ended Sept. 30, 1990 were $52,200,000 and the loss before non-recurring items was $93,000 or $.14 per share.
 The non-recurring items consist mainly of plant closing costs and reorganization costs. As part of its reorganization, Dolco closed one of its manufacturing facilities thereby decreasing overhead costs while retaining the sales volume. The closure was completed by May 31, 1991. Costs of $1,500,000 were incurred during the first five months of 1991 to accomplish this restructuring.
 Reorganization costs have also been significant in the first nine months and in the third quarter of 1991. Reorganization costs total $1,700,000 through Sept. 30, 1991, and were $1,200,000 for the third quarter of 1991.
 Non-recurring costs of $701,000, net for the third quarter of 1991 and $236,000 for the third quarter of 1990 contributed to the net loss of $847,000 or $1.04 per share and $985,000 or $1.50 per share, respectively. Non-recurring costs of $2,812,000, net for the nine months ended Sept. 30, 1991, and $753,000 for the nine months ended Sept. 30, 1990, contributed to the net loss of $3,024,000 or $3.72 per share and $920,000 or $1.40 per share, respectively.
 Net sales were lower in the third quarter of 1991 and year-to- date 1991 than in the comparable periods of 1990 due to the decision of a major customer not to purchase product after Aug. 1, 1990, made by the manufacturing process used by most of Dolco's facilities. This customer has since decided to discontinue using foam packaging for most of its products. Excluding sales to this customer from the 1991 and 1990 comparison, net sales increased 3 percent during the first nine months of 1991 as compared to the first nine months of 1990 and 1 percent in the third quarter of 1991 as compared to the third quarter of 1990. The increase in net sales is due to an increase in sales volume for the periods being considered.
 The gross profit on net sales was 15 percent for the first nine months of 1991 and 14 percent for the first nine months of 1990. The gross profit on net sales was 17 percent and 10 percent for the third quarters of 1991 and 1990, respectively. The increase in gross profit in the third quarter of 1991 as compared to the third quarter of 1990 is a direct result of the closure of one of Dolco's manufacturing facilities in May of 1991 which decreased overhead expenses while the company retained its sales volume.
 As the gross profit analysis is showing, due to its reorganization and closure of one manufacturing facility, Dolco is well poised to meet the future and return to bottom line profitability.
 -0- 11/20/91
 /CONTACT: Maggie Earley of Dolco Packaging Corp., 818-995-1238, ext. 304/ CO: Dolco Packaging Corp. ST: California IN: SU: ERN


AL-CH -- LA012 -- 5377 11/20/91 11:23 EST
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Publication:PR Newswire
Date:Nov 20, 1991
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