4/19/2008 - Deer Valley Corporation Reports Record Profits and per Share Earnings for the Fourth Quarter of 2007
TAMPA, FL--(March 05, 2008) - Deer Valley Corporation ("Deer Valley" or the "Company") (OTCBB: DVLY) today reported summary unaudited financial results for the fourth quarter and year ended December 31, 2007. Revenue for the 2007 fourth quarter was $17.5 million, an increase of 4.6% compared to revenue of $16.7 million in the year earlier period. Net income applicable to common shareholders for the quarter was a record $1.1 million, or $0.05 per diluted share, compared to $0.7 million, or $0.03 per diluted share in the fourth quarter of fiscal 2006.
For the entire year 2007, the Company had revenue of $63.3 million, a decrease of 3.4% compared to revenue of $65.5 million in fiscal 2006. Fiscal 2007 net income applicable to common shareholders increased to $2.0 million, or $0.11 per diluted share, compared to a loss to common stockholders of $6.5 million, or ($1.59 per share).
"We are exceptionally pleased to report record earnings for the fourth quarter and the year ending 2007, a period which has been one of the most challenging in the history of the factory built housing industry," said Charles G. Masters, the Company's CEO. Mr. Masters continued, "The Company's early 2007 decision to begin producing modular homes with limited architectural freedom opened an entirely new market for the Company's finished drywall products. The first solid evidence of this came in mid-2007 with the Company's receipt of $7.5 million dollar contract from the State of Mississippi for the production of 150 experimental cottages (the "MEMA" Cottages). This contract has subsequently been expanded to a total value of $19.5 million for the production of 400 cottages. While our strong fourth quarter results included only 50 of the MEMA Cottages in the quarter, Deer Valley's successful performance under this contract has demonstrated the Company's ability to perform on large multiunit, housing contracts with unique product, bonding and financing requirements. Clear demonstration of this ability has opened new opportunities for the Company to supply modular homes to large scale developers, redevelopers and government entities in the Gulf Coast region."
The Company remains heavily committed to the HUD Code industry. In addition to seeking new ways to assist our independent dealers, we are expanding our product offerings to fill the needs of other price point buyers. While industry conditions are expected to remain challenging in 2008, Deer Valley is well positioned for continued growth in both the modular and HUD Code markets.
During the 4th quarter of 2007, the Company elected to revise its existing agreement with the founders and current operating management of Deer Valley Homebuilders, Inc., the Company's wholly owned subsidiary. Under the revised terms of the agreement, in December of 2007 the Company prepaid $2,767,725 in accrued debt due the founders as a result of a performance based acquisition price adjustment. In addition, the Company issued 2,000,000 restricted shares of the Company's common stock in final satisfaction of the remainder of the Company's obligation. This action temporarily reduced the Company's cash reserves, but it significantly improved certain bank ratios; it eliminated any further accrual of future cash obligations; and it more closely aligned the interests of the management team with those of the shareholders. After the transaction, the Company continued to have sufficient cash reserves, available bank credit lines, and cash flow from operations to meet its short-term working capital requirements.
Also early in the fourth quarter, the Company collected receivables associated with the MEMA Cottage contract and repaid the $5,000,000 short term bridge loan secured by those receivables and outstanding at the end of the third quarter. At the end of the fourth quarter of 2007, the Company again borrowed $1,912,000 under the same bridge loan credit facility as additional MEMA receivables were outstanding.
The Company's financial information presented above is unaudited and, thus, subject to adjustment as a result of the Company's normal year-end audit. The Company's audited financial data will be presented as part of the Form 10-K to be filed prior to March 30, 2008.
About Deer Valley
Deer Valley is a growth-oriented manufactured home builder with headquarters in Tampa, Florida and operations in Guin and Sulligent, Alabama. The Company is dedicated to offering high quality homes that are delivered with a sense of warmth, friendliness, and personal pride. The Company is relatively young, but the management team has over 250 years of combined industry experience from various backgrounds including general management, production, sales, customer service, and finance. All of the Company's plants are operating on a five days per week, single shift schedule. The Company has no idle facilities.
Forward-Looking Statement: Except for factual statements made herein, the information contained in this press release consists of forward-looking statements that involve risks and uncertainties, including the effect of changing economic conditions, competition within the manufactured home industry, customer acceptance of products, fulfillment of contracts with key customers, and other risks and uncertainties. Such forward-looking statements are not guarantees of performance, and Deer Valley's results could differ materially from those contained in such statements. You can generally identify forward-looking statements through words and phrases such as "forecast," "seek," "anticipate," "believe," "estimate," "expect," "intend," "plan," "budget," "project," "may be," "may continue," "may likely result," and similar expressions. Such forward-looking statements speak only as of the date of this release, and Deer Valley undertake no obligation to publicly update any forward-looking statements to reflect new information, events or circumstances after the date of this release.
The corporate offices of Deer Valley are located at 4218 West Linebaugh Avenue, Tampa, FL 33624.
Additional information can be found at: http://www.deervalleycorp.com.
Deer Valley Corporation, Tampa, Florida
Charles G. Masters
State of Mississippi Web Site: www.mscottage.org
SOURCE: Deer Valley Corporation