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DOSKOCIL ANNOUNCES FIRST QUARTER OPERATING RESULTS

 HUTCHINSON, Kan., May 5 /PRNewswire/ -- Doskocil Companies Incorporated (NASDAQ: DOSK) announced today that for the first quarter of 1993, the company posted a net loss of $36.0 million, or $5.88 per share. Included in the quarter is a noncash charge of $34.4 million for the adoption of a new accounting standard requiring companies to establish a liability for post-retirement medical benefits. Without the effects of the new accounting standard, the first quarter 1993 net loss would have been $1.5 million. Net income for the first quarter of 1992 was $0.4 million.
 Operating income for the first quarter of 1993 declined $1.4 million to $1.7 million from $3.1 million for the same period last year. Included in the determination of operating income is amortization of intangible assets of $1.5 million during both the current period and the 1992 period. The decline in operating income is primarily attributable to: (i) compressed gross margins which resulted from the temporary inability to raise selling prices as quickly as the unexpected sharp increase in raw material costs which occurred in the latter half of the 1993 first quarter (ii) reduced sales and margins in connection with the realignment of the company's deli business in the first quarter and (iii) increased noncash costs of $0.4 million resulting from the implementation of the new accounting standard for post-retirement medical benefits. These decreases in operating income were partially offset by the elimination of certain losses described below.
 In the fourth quarter of 1992 the company decided to close its last remaining slaughtering and fresh pork operation in Logansport, Indiana. As a result of that decision, the company recorded a $32.0 million provision for plant closing which included, among other costs, the estimated operating losses during 1993 until the operation is closed. Accordingly, operating income in the first quarter of 1993 does not include losses from the slaughtering and fresh pork operation. The first quarter of 1992 included $0.7 million of such losses.
 Sales declined $31.7 million, or 18.0 percent, in the first quarter of 1993 to $144.6 million from $176.2 million for the same period last year. The decline is attributable to the exclusion of sales from the slaughtering and fresh pork operation at Logansport. In the 1992 period such totalled $37.8 million.
 John T. Hanes, chairman and chief executive officer, stated, "The company's adoption of the mandated accounting change for post-retirement benefits in the first quarter makes comparison of the 1993 period's net loss with the net income for the first quarter of 1992 somewhat misleading. Operating income is a better yardstick. Furthermore, the company's loss before change in accounting principle during the first quarter of 1993 was not surprising because, due to seasonality factors, the first quarter of the year is typically the weakest, and losses are not uncommon during this period." Hanes went on to say that with raw material prices having stabilized at the end of the first quarter and sales volume expanding, particularly in the foodservice segment, the outlook for the remainder of the year is encouraging.
 Doskocil specializes in processing and marketing pepperoni, beef and pork toppings to the pizza industry as well as boneless hams, sausage, bacon, and other branded and processed meat products for the foodservice, delicatessen and retail markets.
 DOSKOCIL COMPANIES INCORPORATED
 Condensed Consolidated Statement of Operations
 (unaudited, in thousands, except per share figures)
 Three Months Ended April 3, 1993 March 28, 1992
 Net sales $ 144,555 $ 176,222
 Cost of sales 120,472 150,098
 Gross profit 24,083 26,124
 Operating expenses:
 Selling 14,321 14,229
 General and administrative 6,556 7,282
 Amortization of intangible assets 1,546 1,547
 Total operating expenses 22,423 23,058
 Operating income 1,660 3,066
 Other income (expense):
 Interest and financing costs (3,017) (2,910)
 Other, net (135) 239
 Income (loss) before income taxes (1,492) 395
 Provision for income taxes (38) (16)
 Income (loss) before change in
 accounting principle (1,530) 379
 Cumulative effect of change in
 accounting for postretirement
 benefits other than pensions (34,426) --
 Net income (loss) (35,956) 379
 Earnings (loss) per share --
 primary and fully diluted $ (5.88) $ 0.07
 Weighted average number of common and
 common equivalent shares outstanding
 -- primary and fully diluted 6,115 5,821
 -0- 5/5/93
 /CONTACT: Theodore A. Myers, senior vice president and chief financial officer of Doskocil Companies Incorporated, 316-663-1005, or Desmond Towey or Bernadette McLaughlin both of Desmond Towey & Associates, 212-888-7600, for Doskocil Companies/
 (DOSK)


CO: Doskocil Companies ST: Kansas IN: FOD SU: ERN

LD -- NY011 -- 4717 05/05/93 08:59 EDT
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Publication:PR Newswire
Date:May 5, 1993
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