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    NEW YORK, Sept. 15 /PRNewswire/ -- DWG Corporation (AMEX: DWG) today announced results of operations for the first fiscal quarter ended July 31, 1993.
    Revenues for the first quarter from the company's four core businesses (fast food, soft drink, textiles and liquified petroleum gas) increased by 10.4 percent in comparison with the prior year.  However, revenues from continuing operations for the first quarter were $264.1 million compared with $268.3 million for the prior year due to the loss of revenues associated with non-core businesses sold after the first quarter of the prior fiscal year.
    Operating profit from continuing operations for the fiscal 1994 first quarter were $18.3 million compared with operating profit of $14.7 million for the year ago period.  Growth in operating profit was reported by the soft drink and textile businesses.  Fast food results were comparable to last year after higher levels of marketing expenses, the benefits of which will not be realized until subsequent periods. Although liquified petroleum gas normally reports a loss for the first fiscal quarter, the loss this year was higher than normal due to higher operating costs and expenses.  The operating profit of core businesses does not reflect the full benefit of restructuring efforts currently underway.
    Commenting on the company's results, Nelson Peltz, chairman and chief executive officer said:  "Since we acquired control of the company on April 24, we have moved rapidly to appoint new chief executive officers for each of our core businesses.  We are in the process of reducing significantly the corporate headquarters staff of the company as part of our commitment to decentralize decision making.  Operating profit continues to suffer from significant duplicative overhead costs as we transition from a highly centralized to a decentralized management structure.  While much was accomplished in the first fiscal quarter, much remains to be done, the results of which will not be reflected in earnings until future periods."
    During the first quarter, the board of directors of Southeastern Public Service Company, a 71 percent subsidiary of the company, authorized the sale or discontinuance of all of SEPSCO's operating businesses and assets, other than the business of Public Gas Company, which SEPSCO expects to transfer to National Propane, a wholly owned subsidiary of the company.  In addition, on Sept. 1, SEPSCO announced that it had entered into an agreement to sell substantially all of the assets of its subsidiaries which are engaged in the business of providing tree maintenance services to municipalities and electric utilities for a sales price of approximately $70 million in cash together with the assumption of certain liabilities up to an aggregate of $5 million.  "The sale or discontinuance of most of SEPSCO's operations will allow management to focus on our core businesses," Peltz stated.  "In addition, the proceeds from the sale of SEPSCO's tree maintenance subsidiaries will greatly add to our financial resources. Even more important, during the first quarter the company reentered the public financing markets for the first time in a number of years with a successful, $275 million bond offering for Royal Crown Corporation. This financing, combined with the $180 million financing completed at Graniteville in late April, provides considerable liquidity to fund our capital expenditure and working capital programs for the next two years."
    During the first quarter, the company spent $6 million on capital additions.  Current capital expenditure programs should result in more than $40 million being spent during this fiscal year.  While the cost of having sufficient liquidity available to fund these capital expenditures will adversely affect operating profit for fiscal 1994, these programs should enhance operating profit significantly in future periods.
    On an aftertax basis, income from continuing operations was $3,000 (a loss per share of $.07 after preferred dividend requirements) compared with a loss in the prior year's quarter of $1,843,000 ($.07 per share).  Including the results of discontinued operations prior to the date of discontinuance and the effect of adopting changes in accounting principles, the company reported net income of $634,000 (a loss of $.04 per share after preferred dividend requirements) compared with a net loss of $7.5 million ($.29 per share) in the prior year period.
    DWG Corporation is a diversified company which, through its direct and indirect operating subsidiaries, is engaged in four primary businesses:  fast food (Arby's), soft drinks (Royal Crown Cola), textiles (Graniteville) and liquified petroleum gas (National Propane).
           (In thousands except per share amounts)
                                         First Quarter
                                         Ended July 31,
                                     1993             1992
    Revenues                    $ 264,074        $ 268,288
    Operating Profit               18,307           14,691
    Income (Loss) From Continuing
     Operations                         3           (1,843)
    Income From Discontinued
     Operations (A)                   631              691
    Cumulative Effect of Changes
     in Accounting Principles (B)     ---           (6,388)
    Net Income (Loss)           $     634        $  (7,540)
    Income (Loss) Per Share (C):
     Continuing Operations      $    (.07)       $    (.07)
     Discontinued Operations          .03              .03
     Cumulative Effect of Changes
      in Accounting Principles        ---             (.25)
     Net Income (Loss)          $    (.04)       $    (.29)
    Average Outstanding Shares     21,166           25,890
    (A) -- Reflects the operating results associated with the company's utility and municipal services segment and other discontinued operations prior to the date of discontinuance.
    (B) -- Represents the retroactive restatement to the first quarter of fiscal 1993 for changes in accounting principles relating to income taxes and post-retirement benefits.
    (C) -- Income (loss) per share is computed by dividing net income (loss) less (plus) dividend requirements on preferred stock ($1,458,000 and $3,000 for the three months ended July 31, 1993 and 1992, respectively) by the weighted average number of outstanding common shares.
    -0-             09/15/93
    CONTACT:  Joseph A. Levato, executive vice president and chief financial officer of DWG Corporation, 212-230-3035

-- FL009 -- X212 09/15/93
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Publication:PR Newswire
Date:Sep 15, 1993

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