EX-99.1 2 l15672aexv99w1.htm EX-99.1 PRESS RELEASE EX-99.1 Press Release
 

Exhibit 99-1
LEXINGTON PRECISION CORPORATION
40 East 52nd Street
New York, NY 10022
FOR IMMEDIATE RELEASE
LEXINGTON PRECISION REPORTS SECOND QUARTER RESULTS
NEW YORK, August 15, 2005 — Lexington Precision Corporation reported net income of $17,000, or zero cents per diluted common share, for the second quarter ended June 30, 2005, compared to net income of $1,282,000, or 26 cents per diluted common share, for the second quarter of 2004.
Net income for the three-month and six-month periods ended June 30, 2005, included a pre-tax gain of $1,100,000 on the sale of a vacant manufacturing facility in Casa Grande, Arizona, which was part of the company’s Metals Group. Net income for the three-month and six-month periods ended June 30, 2004, included a pre-tax gain of $3,252,000 on the repurchase of the company’s $7,500,000 senior, unsecured note.
The loss from continuing operations totaled $150,000, or 3 cents per diluted common share, for the second quarter of 2005, compared to income from continuing operations of $2,139,000, or 43 cents per diluted common share, for the second quarter of 2004. Income from discontinued operations totaled $167,000, or 3 cents per diluted common share, compared to a loss from discontinued operations of $857,000, or 17 cents per diluted common share, for the second quarter of 2004.
Net sales for the second quarter of 2005 were $25,294,000, compared to $29,474,000 for the second quarter of 2004, a decrease of 14%. Net sales of the Rubber Group decreased by 18% to $22,218,000, while net sales of the Metals Group increased by 27% to $3,076,000.
During the second quarter of 2005, income from operations totaled $2,122,000, compared to $1,065,000 for the second quarter of 2004. Income from operations at the Rubber Group decreased to $2,082,000 from $2,607,000. The Metals Group reported income from operations of $630,000, compared to a loss from operations of $792,000 for the second quarter of 2004. The improved results at the Metals Group resulted primarily from the $1,100,000 pre-tax gain on the sale of the Casa Grande, Arizona, real estate. The loss from operations at the Corporate Office decreased to $590,000 from $750,000.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations for the second quarter of 2005, totaled $4,259,000, compared to EBITDA from continuing operations of $3,124,000 for the second quarter of 2004, an increase of 36%. EBITDA for the Rubber Group decreased to $3,924,000 from $4,291,000, EBITDA for the Metals Group improved to $923,000 from negative $427,000, and EBITDA for the Corporate Office improved to negative $588,000 from negative $740,000. For more information about EBITDA, please see the section of the press release captioned “Notice Relating to Use of Non-GAAP Measure.”
Net cash provided by operating activities of continuing operations for the second quarter of 2005 totaled $2,313,000, compared to $1,602,000 for the second quarter of 2004, an increase of 44%.

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Lexington Precision Corporation
August 15, 2005
The company reported a net loss of $683,000, or 14 cents per diluted common share, for the first six months of 2005, compared to net income of $1,126,000, or 23 cents per diluted common share, for the first six months of 2004.
Net sales for the first six months of 2005 were $51,578,000, compared to $60,081,000 for the first six months of 2004. Net sales of the Rubber Group decreased by 18% to $45,222,000, while net sales of the Metals Group increased by 21% to $6,356,000.
During the first six months of 2005, income from operations totaled $3,459,000, compared to $3,270,000 for the first six months of 2004. Income from operations at the Rubber Group decreased to $4,388,000 from $6,149,000. The Metals Group reported income from operations of $326,000 for the first six months of 2005, compared to a loss from operations of $1,553,000 for the first six months of 2004. The improved results at the Metals Group resulted in part from the $1,100,000 pre-tax gain on the sale of the Casa Grande, Arizona, real estate. Corporate Office expenses decreased to $1,255,000 for the first six months of 2005, from $1,326,000 for the first six months of 2004.
EBITDA for the first six months of 2005 totaled $7,731,000, compared to EBITDA of $7,460,000 for the first six months of 2004, an increase of 4%. EBITDA for the Rubber Group decreased 16% to 8,033,000, while EBITDA for the Metals Group improved to $947,000 from negative $807,000. EBITDA for the Corporate Office improved to negative $1,249,000 from negative $1,306,000.
Net cash provided by operating activities for the first six months of 2005 totaled $2,156,000, compared to $2,073,000 for the first six months of 2004, an increase of 4%.
Attached to this press release are tables setting forth our condensed consolidated statements of operations and selected consolidated and segment financial data, including information concerning our cash flows from operations and reconciliations of income from continuing operations to EBITDA from continuing operations.
Notice Relating to Use of Non-GAAP Measure
EBITDA is not a measure of performance under U.S. generally accepted accounting principles (GAAP) and should not be considered in isolation or used as a substitute for income from operations, net income, net cash provided by operating activities, or other operating or cash flow statement data prepared in accordance with GAAP. We have presented EBITDA because this measure is used by investors, as well as our own management, to evaluate the operating performance of our business, including its ability to incur and to service debt. Nevertheless, EBITDA has distinct limitations as compared to a GAAP number such as net income. By excluding interest and tax payments, for example, an investor may not see that both represent a reduction in cash available to the company. Likewise, depreciation and amortization, while non-cash items, represent generally the devaluation of assets that produce revenue for the company. Our definition of EBITDA may not be the same as the definition of EBITDA used by other companies.
Lexington Precision Corporation manufactures rubber and metal components that are used primarily by manufacturers of automobiles, automotive replacement parts, and medical devices.
Contact: Warren Delano, President (212) 319-4657

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LEXINGTON PRECISION CORPORATION
Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)
(unaudited)
                                 
    Quarter Ended     Six Months Ended  
    June 30     June 30  
    2005     2004     2005     2004  
    (unaudited)     (unaudited)  
Net sales
   $ 25,294     $ 29,474     $ 51,578     $ 60,081  
Cost of sales
     22,553       26,381       45,715       52,842  
 
                        
Gross profit
     2,741       3,093       5,863       7,239  
Selling and administrative expenses
     1,719       2,028       3,504       3,969  
Gain on sale of assets held for sale
     1,100       —       1,100       —  
 
                        
Income from operations
     2,122       1,065       3,459       3,270  
Other income (expense):
                                
Interest expense
     (2,328 )     (2,122 )     (4,638 )     (4,209 )
Gain on repurchase of debt
     77       3,252       77       3,252  
 
                        
Income (loss) from continuing operations before income tax
     (129 )     2,195       (1,102 )     2,313  
Income tax provision
     21       56       42       71  
 
                        
Income (loss) from continuing operations
     (150 )     2,139       (1,144 )     2,242  
Income (loss) from discontinued operations
     167       (857 )     461       (1,116 )
 
                        
Net income (loss)
   $ 17     $ 1,282     $ (683 )   $ 1,126  
 
                        
Basic and diluted net income (loss) per share of common stock:
                                
Continuing operations
   $ (0.03 )   $ 0.43     $ (0.23 )   $ 0.46  
Discontinued operations
     0.03       (0.17 )     0.09       (0.23 )
 
                        
Net income (loss)
   $ —     $ 0.26     $ (0.14 )   $ 0.23  
 
                        
Reconciliation of net income (loss) from continuing operations to EBITDA from continuing operations:
                                
Income (loss) from continuing operations
   $ (150 )   $ 2,139     $ (1,144 )   $ 2,242  
Add:
                                
Depreciation and amortization
     2,137       2,059       4,272       4,190  
Gain on repurchase of debt
     (77 )     (3,252 )     (77 )     (3,252 )
Interest expense
     2,328       2,122       4,638       4,209  
Income tax provision
     21       56       42       71  
 
                        
EBITDA from continuing operations
   $ 4,259     $ 3,124     $ 7,731     $ 7,460  
 
                        
Net cash provided by operating activities
   $ 2,313     $ 0 1,602     $ 2,156     $ 2,073  
 
                        

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LEXINGTON PRECISION CORPORATION
Select Consolidated and Segment Financial Data
Continuing Operations
(in thousands)
                                 
    Quarter Ended     Six Months Ended  
    June 30     June 30  
    2005     2004     2005     2004  
    (unaudited)     (unaudited)  
Net sales:
                                
Rubber Group
   $ 22,218     $ 27,044     $ 45,222     $ 54,847  
Metals Group
     3,076       2,430       6,356       5,234  
 
                        
Total net sales
   $ 25,294     $ 29,474     $ 51,578     $ 60,081  
 
                        
Income (loss) from operations:
                                
Rubber Group
   $ 2,082     $ 2,607     $ 4,388     $ 6,149  
Metals Group
     630       (792 )     326       (1,553 )
Corporate Office
     (590 )     (750 )     (1,255 )     (1,326 )
 
                        
Total income from operations
     2,122       1,065       3,459       3,270  
 
                        
Depreciation and amortization included in income from operations:
                                
Rubber Group
     1,842       1,684       3,645       3,424  
Metals Group
     293       365       621       746  
Corporate Office
     2       10       6       20  
 
                        
Total depreciation and amortization
     2,137       2,059       4,272       4,190  
 
                        
Earnings (loss) before interest, taxes, depreciation, and amortization (EBITDA):
                                
Rubber Group
     3,924       4,291       8,033       9,573  
Metals Group
     923       (427 )     947       (807 )
Corporate Office
     (588 )     (740 )     (1,249 )     (1,306 )
 
                        
Total EBITDA
   $ 4,259     $ 3,124     $ 7,731     $ 7,460  
 
                        
Capital expenditures:
                                
Rubber Group
   $ 822     $ 1,572     $ 2,122     $ 2,482  
Metals Group
     124       235       166       627  
Corporate Office
     —       —       3       —  
 
                        
Total capital expenditures
   $ 946     $ 1,807     $ 2,291     $ 3,109  
 
                        
# # #

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