EX-99 3 a4449160ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Dayton Superior Reports Second Quarter Results DAYTON, Ohio--(BUSINESS WIRE)--Aug. 5, 2003--Dayton Superior today reported that sales for the second quarter of 2003 totaled $100.3 million, a 5.9% decline from year earlier second quarter sales of $106.5 million. Sales declined as a lagging domestic economy continued to adversely impact non-residential construction activity during the recent quarter. Gross margin for the second quarter of 2003 was 30.9% as compared to 34.4% in the second quarter of 2002. This was largely due to reduced rental revenues. The decline in gross margin was offset in part by management's aggressive actions to cut SG&A expenses. These expenses declined by 12.0%, twice the rate of the sales decline, thus enabling Dayton Superior to post a 140 basis point improvement in SG&A expenses as a percent of net sales. Dayton's SG&A declined to 20.0% in the recent quarter, the lowest quarterly level in several years, from 21.4% in the second quarter of 2002. Income from operations in the recent quarter totaled $10.5 million versus $13.3 million in the second quarter of 2002. The operating margin was 10.5% for the recent quarter versus 12.5% in the comparable quarter of 2002. The Company reported a net loss of $0.5 million in the second quarter of 2003, versus net income of $2.9 million in the second quarter of 2002. Had the Company not incurred a pretax charge of $2.5 million resulting from prepayment of several classes of debt in June of 2003, it would have reported a net profit for the recent quarter. Second quarter 2003 Credit Agreement EBITDA (see definition and reconciliation to net income (loss) following the last financial table in the accompanying tables) totaled $16.6 million versus $18.8 million in the like quarter of 2002. Dayton's Credit Agreement EBITDA margin (see definition following the last financial table in the accompanying tables) was 16.5% in the recent quarter versus 17.6% in the second quarter of 2002. Sales for the first half of 2003 totaled $168.5 million, versus $185.0 million in the year earlier period. Gross margins declined to 30.9% for the first half of 2003 versus 34.1% in the first half of 2002 as declining rental revenues impacted profitability. SG&A expenses for the six months declined 13.9% year-over-year as management continued its intense efforts to minimize costs. For the most recent six months, Dayton Superior achieved an operating margin of 6.8%, versus 8.8% in the first half of 2002. The Company reported a net loss of $5.9 million for the half versus the net loss of $17.3 million reported in the first half of 2002. Included in the first half 2002 loss was a goodwill write-down of $17.1 million after taxes. For the first half of 2003, Dayton Superior achieved Credit Agreement EBITDA (see definition and reconciliation to net income (loss) following the last financial table in the accompanying tables) of $23.7 million versus $27.1 million in the year earlier six months. The Company's Credit Agreement EBITDA margin (see definition following the last financial table in the accompanying tables) was almost fully maintained at 14.1% for the 2003 first half versus 14.6% in the 2002 first half. Stephen R. Morrey, Dayton Superior's President and Chief Executive Officer said, "The economic malaise which has characterized the U.S. economy in general, and the non-residential construction industry in particular, negatively impacted both our sales and our gross margins. We continued to make every effort to control our manufacturing costs and have sharply reduced our SG&A expenses in both dollar terms and relative to sales. During the quarter, we strengthened our financial position by selling $165 million of Senior Second Secured Notes in a private placement. Proceeds were used to prepay our acquisition credit facility and several outstanding term loans, as well as a portion of our revolving credit facility. Subsequently, we also repurchased a portion of our Senior Subordinated Notes. This debt offering, which was oversubscribed, not only enhances our liquidity, but allows us the financial flexibility under our covenants to implement additional strategic growth initiatives in the future. We believe these benefits outweigh the additional interest cost. Additionally, we announced on July 30th, the acquisition of certain assets of Safway Formwork Systems from ThyssenKrupp AG. Safway sells and rents European style concrete forming and shoring systems, an area in which our Symons division has become increasingly active." The Company has scheduled a conference call at 11:00 a.m. EDT, August 6, 2003 to discuss the second quarter 2003 results. The conference call can be accessed by dialing 1-303-224-6997. A replay of the call will be available from 2:00 p.m. EDT on August 6, 2003 through 11:59 p.m. on August 14, 2003 by calling 1-800-615-3210 and entering reservation #224002. Dayton Superior Corporation, with 2002 revenues of $378 million, is the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction and metal accessories used in masonry construction and has an expanding construction chemicals business. The Company's products, which are marketed under the Dayton Superior(R), Dayton/Richmond(R), Symons(R), American Highway Technology(R) and Dur-O-Wal(R) names, among others, are used primarily in two segments of the construction industry: non-residential buildings and infrastructure construction projects. Note: Certain statements made herein concerning anticipated future performance are forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs and assumptions of management and are not guarantees of future performance. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of important factors. Representative examples of these factors include (without limitation) the cyclical nature of nonresidential building and infrastructure construction activity, which can be affected by factors outside Dayton Superior's control such as the general economy, governmental expenditures, interest rate increases, and changes in banking and tax laws; the amount of debt we must service; the effects of weather and the seasonality of the construction industry; our ability to implement cost savings programs successfully and on a timely basis; and Dayton Superior's ability to successfully integrate acquisitions on a timely basis. This list of factors is not intended to be exhaustive, and additional information concerning relevant risk factors can be found in Dayton Superior's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Registration Statement on Form S-4 filed with the Securities and Exchange Commission. (tables follow) Dayton Superior Corporation Summary Income Statement, Unaudited (in thousands) For the fiscal quarter ended: June 27, 2003 June 28, 2002 Net Sales $100,265 $106,506 Cost of Sales 69,253 69,919 Gross Profit 31,012 36,587 Gross Margin 30.9% 34.4% Selling, General & Administrative 20,054 22,788 Selling, General & Administrative % 20.0% 21.4% Facility Closing and Severance Expenses 349 453 Amortization of Intangibles 130 78 Operating Income 10,479 13,268 Operating Margin 10.5% 12.5% Interest Expense 9,012 8,407 Loss on Early Extinguishment of Long-Term Debt 2,480 -- Other Expense 96 45 Income (Loss) Before Income Taxes (1,109) 4,816 Pretax Margin (1.1%) 4.5% Provision (Benefit) for Income Taxes (649) 1,926 Effective Tax Rate 58.5% 40.0% Net Income (Loss) ($460) $2,890 Credit Agreement EBITDA(A) $16,561 $18,783 Credit Agreement EBITDA Margin(A) 16.5% 17.6% (A) See definition and reconciliation to net income (loss) following the last financial table Dayton Superior Corporation Summary Income Statement, Unaudited (in thousands) For the fiscal six months ended: June 27, 2003 June 28, 2002 Net Sales $168,488 $185,008 Cost of Sales 116,476 121,904 Gross Profit 52,012 63,104 Gross Margin 30.9% 34.1% Selling, General & Administrative 39,615 46,016 Selling, General & Administrative % 23.5% 24.9% Facility Closing and Severance Expenses 744 574 Amortization of Intangibles 259 151 Operating Income 11,394 16,363 Operating Margin 6.8% 8.8% Interest Expense 17,073 16,413 Loss on Early Extinguishment of Long-Term Debt 2,480 -- Other Expense 137 150 Loss Before Income Taxes (8,296) (200) Pretax Margin (4.9%) (0.1%) Benefit for Income Taxes (2,446) (80) Effective Tax Rate 29.5% 40.0% Net Loss Before Cumulative Effect of Change in Accounting Principle (5,850) (120) Cumulative Effect of Change in Accounting Principle, Net of Income Tax Benefit of $2,754 -- (17,140) Net Loss ($5,850) ($17,260) Credit Agreement EBITDA(A) $23,733 $27,092 Credit Agreement EBITDA Margin(A) 14.1% 14.6% (A) See definition and reconciliation to net loss following the last financial table Dayton Superior Corporation Segment Data, Unaudited (in thousands) For the fiscal quarter ended: June 27, 2003 June 28, 2002 Sales: Construction Products Group $73,295 $80,710 Symons 33,279 32,523 Intersegment Eliminations (6,309) (6,727) --------- --------- Net Sales $100,265 $106,506 Income from Operations: Construction Products Group $8,306 $11,629 Symons 8,972 7,402 Corporate (3,511) (2,790) Intersegment Eliminations (3,288) (2,973) --------- --------- Income from Operations $10,479 $13,268 For the fiscal six months ended: June 27, 2003 June 28, 2002 Sales: Construction Products Group $120,676 $136,836 Symons 58,041 59,171 Intersegment Eliminations (10,229) (10,999) --------- --------- Net Sales $168,488 $185,008 Income from Operations: Construction Products Group $9,548 $15,698 Symons 13,872 11,428 Corporate (6,545) (5,805) Intersegment Eliminations (5,481) (4,958) --------- --------- Income from Operations $11,394 $16,363 Dayton Superior Corporation Supplementary Information, Unaudited % Change 2003 vs. 2002 Second Quarter First Half Results of Operations: Construction Products Group (9.2%) (11.8%) Symons 2.3% (1.9%) Net Sales (5.9%) (8.9%) Gross Profit (15.2%) (17.6%) Selling, General & Administrative (12.0%) (13.9%) Facility Closing & Severance Expenses (23.0%) 29.6% Amortization of Intangibles 66.7% 71.5% Operating Income (21.0%) (30.4%) Credit Agreement EBITDA(A) (11.8%) (12.4%) (A) See definition and reconciliation to net income (loss) following the last financial table. Dayton Superior Corporation Summary Balance Sheet, Unaudited (in thousands) As of: Jun 27, 2003 Dec. 31, 2002 Jun 28, 2002 Summary Balance Sheet: Cash $ -- $ 2,404 $ 4,597 Accounts Receivable, Net 70,575 61,165 70,338 Inventories 52,311 47,911 55,360 Other Current Assets 15,676 17,257 16,357 Total Current Assets 138,562 128,737 146,652 Rental Equipment, Net 68,167 63,160 67,345 Property & Equipment, Net 61,699 61,246 60,918 Goodwill & Other Assets 119,072 120,828 121,274 Total Assets $387,500 $373,971 $396,189 Current Portion of Long-Term Debt $ 1,167 $ 6,991 $ 5,485 Accounts Payable 30,820 25,667 32,311 Other Current Liabilities 20,290 30,328 25,337 Total Current Liabilities 52,277 62,986 63,133 Long-Term Debt 322,669 292,545 311,161 Other Long-Term Liabilities 22,118 22,681 22,325 Shareholders' Deficit (9,564) (4,241) (430) Total Liabilities & Shareholders' Deficit $387,500 $373,971 $396,189 Dayton Superior Corporation Summary Cash Flow Statement, Unaudited (in thousands) For the fiscal six months ended: June 27, 2003 June 28, 2002 Net Loss ($5,850) ($17,260) Non-Cash Adjustments to Net Loss (508) 20,688 Changes in Assets and Liabilities (18,749) (28,963) Net Cash Used in Operating Activities (25,107) (25,535) Property, Plant and Equipment Additions, Net (3,727) (4,630) Rental Equipment Additions, Net 4,198 5,404 Net Cash Provided By Investing Activities 471 774 Financing Activities 21,743 24,194 Other, Net 489 175 Net Decrease in Cash ($2,404) ($392) Dayton Superior Corporation Definition and Reconciliation of Credit Agreement EBITDA to Net Income (Loss), Unaudited (in thousands) For the fiscal quarter ended: June 27, 2003 June 28, 2002 Net Income (Loss) $(460) $2,890 Provision (Benefit) for Income Taxes (649) 1,926 Other Expense 96 45 Loss on Early Extinguishment of Long-Term Debt 2,480 -- Interest Expense 9,012 8,407 ----- ----- Income from Operations $10,479 $13,268 Facility Closing and Severance Expenses 349 453 Depreciation Expense 5,603 4,984 Amortization of Intangibles 130 78 --- -- Credit Agreement EBITDA $16,561 $18,783 Credit Agreement EBITDA Margin: Credit Agreement EBITDA $16,561 $18,783 Net Sales 100,265 106,506 ------- ------- Credit Agreement EBITDA Margin 16.5% 17.6% For the fiscal six months ended: June 27, 2003 June 28, 2002 Net Income (Loss) $(5,850) $(17,260) Cumulative Effect of Change in Accounting Principle -- 17,140 Benefit for Income Taxes (2,446) (80) Other Expense 137 150 Loss on Early Extinguishment of Long-Term Debt 2,480 -- Interest Expense 17,073 16,413 ------ ------ Income from Operations $11,394 $16,363 Facility Closing and Severance Expenses 744 574 Depreciation Expense 11,336 10,004 Amortization of Intangibles 259 151 --- --- Credit Agreement EBITDA $23,733 $27,092 Credit Agreement EBITDA Margin: Credit Agreement EBITDA $23,733 $27,092 Net Sales 168,488 185,008 ------- ------- Credit Agreement EBITDA Margin 14.1% 14.6% Note: Credit Agreement EBITDA, as defined in our credit agreement and as we use it in this press release, is calculated as net income (loss) before cumulative effect of change in accounting principle, interest expense, loss on early extinguishment of long-term debt, provision (benefit) for income taxes, depreciation expense, amortization of intangibles, facility closing and severance expenses, and other expense. Credit Agreement EBITDA margin, as we use it in this press release, is calculated as Credit Agreement EBITDA divided by net sales. Dayton Superior believes that certain investors may find Credit Agreement EBITDA to be a useful tool for measuring a company's ability to service its debt. Credit Agreement EBITDA does not represent net cash flows from operating activities, as defined by U.S. generally accepted accounting principles, and is not a substitute for operating income or net income (loss) as an indicator of operating performance or operating cash flows as a measure of liquidity. The way we calculate Credit Agreement EBITDA may differ from that used by other companies and, therefore, comparability may be limited. CONTACT: Dayton Superior Stephen R. Morrey, 937-428-7172 Fax: 937-428-9115